UPDATE 5-U.S. oil falls to $74, heads for monthly loss

                                
 * European equities fall, Wall Street opens lower
                                
 * U.S. crude stocks seen rising for second straight week
                                
 * U.S. home prices rise more than expected in June
                                
 * Coming Up: API weekly oil stocks data; 2030 GMT
 
                                
 (Updates prices, adds details)
                                
 By Alex Lawler
                                
 LONDON, Aug 31 (Reuters) - U.S. crude oil fell to around $74
a barrel on Tuesday and was heading for its first monthly
decline since May, pressured by bulging stockpiles and concern
about the strength of economic growth and future demand.
                                
 Crude oil stocks in the United States, the world's largest
consumer, were expected to rise for a second week. Total
petroleum inventories are already at the highest since at least
1990 according to government data.
                                
 "Oil is on the back foot again after making a recovery
attempt late last week that failed at $75," said Carsten
Fritsch, analyst at Commerzbank. "Fundamentals are still looking
bearish with fragile demand in the U.S. and record high
stockpiles."
                                
 U.S. crude for October delivery <CLc1> fell 80 cents to
$73.90 a barrel by 1341 GMT, falling for a second day. Brent
crude for October <LCOc1> declined 52 cents to $76.08.
                                
 Oil pared its decline after the Standard & Poor's/Case
Shiller home price indexes showed U.S. single-family home prices
gained more than expected in June, countering the recent spate
of gloomy economic reports. [ID:nN31232408]
                                
 Still, concern about the pace of economic recovery weighed
on sentiment in equity markets -- which have a strong positive
correlation with oil prices. European stocks were down and Wall
Street opened lower.
                                
 Crude in New York is on track to fall more than 6 percent
this month, after rising in July and June. Brent is at an
atypical premium to U.S. crude as weak supply and demand
fundamentals pressure the U.S. benchmark.
                                
 Data from Japan, the world's third-largest oil consumer, on
Tuesday showed total oil product sales rose more than expected
in July, but August manufacturing activity expanded at the
slowest pace in more than a year. [ID:nTOE67U04G]
[ID:nTOE67U00F]
                                
 Tuesday sees the release of other U.S. indicators including
the Federal Open Market Committee's minutes from its meeting of
Aug. 10. [ID:nN30195539]
                                
 Weekly U.S. oil inventory data will be released beginning
with a report from the American Petroleum Institute at 4:30 p.m.
EDT (2030 GMT) on Tuesday.
                                
 The average of 10 forecasts in a Reuters poll called for a
1.3-million-barrel increase in U.S. crude stocks in the week to
Aug. 27, with eight analysts expecting an increase. [EIA/S]
                                
 The U.S. government's Energy Information Administration
revised down U.S. oil demand in June, but consumption was still
at the highest since October 2008. [ID:nN30175306]
                                
 There remained no immediate threat on Tuesday of disruption
to U.S. Gulf oil and gas output due to storms.
                                
 Hurricane Earl moved on a path toward the North Carolina
coast of the eastern U.S. seaboard on Tuesday, the U.S. National
Hurricane Center said. It posed no threat to major U.S. oil and
gas installations in the U.S. Gulf. [ID:nN31228995]
 (Additional reporting by Florence Tan; Editing by Alison
Birrane)