UPDATE 1-Oil falls toward $78 on recession, demand concerns

                                
 * Concerns over economy and demand resurface * U.S. retail
gasoline price in biggest weekly fall on record
                                
 * U.S. weekly oil stocks seen higher
 (Updates prices, Omar strength, adds China growth forecast)
                                
 SINGAPORE, Oct 15 (Reuters) - Oil fell on Wednesday but
held above $78, as traders' fears of a global recession just
about outweighed optimism for an economic recovery spurred by
bank rescue schemes.
                                
 Plans by the United States and European powers to infuse
trillions of dollars into ailing financial houses sparked a
brief rally in global markets this week, before prevailing
bleak economic sentiment resurfaced. [ID:nSP383182]
                                
 U.S crude <CLc1> fell 48 cents to $78.15 a barrel by 0508
GMT, while London Brent crude <LCOc1> slipped 33 cents to
$74.20.
                                
 Oil settled more than 3 percent lower on Tuesday after
having climbed more than $3 a barrel earlier in the session, in
line with Wall Street's weaker close following its biggest
one-day gain ever. [.N]
                                
 "I can't see anything really to drive prices higher in the
short term. At the moment, prices are just taking their time
and trading in a tight range," said Peter McGuire, managing
director of Commodity Warrants Australia.
                                
 Slumping demand in the United States and other major
consumers, the financial crisis and a flight of investors into
safe haven investments have dragged crude off record peaks over
$147 a barrel hit in July.
                                
 While No. 2 consumer China saw September crude imports grow
by double-digit percentages for the second month, the impact of
the financial turmoil and delays to some new refinery projects
may mean slower consumption in coming months. [ID:nPEK202279]
                                
 China's annual economic growth probably dipped below 10
percent in the third quarter, ending a run of 10 straight
quarters in double digits, as the world's No. 4 economy is hit
by slowing global demand, a Reuters poll showed.
[ID:nPEK202912]
                                
 "It's not all doom and gloom... with prices coming down
tremendously from the highs of July, money can now feed other
parts of people's consumption instead of going straight to the
petrol pumps," McGuire said.
                                
 In the United States, average retail gasoline prices fell
33.3 cents over the last week to $3.15 a gallon, the biggest
price decline ever recorded by the government, the Energy
Department said on Tuesday. [ID:nN14207980]
                                
 Some price support came from news that OPEC's seaborne oil
exports, excluding Angola and Ecuador, fell 600,000 barrels per
day (bpd) in September, Lloyd's Marine Intelligence Unit (LMIU)
said on Tuesday. [ID:nLE336611]
                                
 Omar grew from a tropical storm to hit hurricane strength
on Tuesday as it headed toward Puerto Rico and the small
islands of the northeastern Caribbean, the U.S. National
Hurricane Center said. [ID:nN14253229]
                                
 The storm has disrupted activity at Venezuela's 200,000
barrel-per-day Puerto La Cruz refinery, knocking out power to
some units and forcing authorities to suspend tankers'
movements at the facility's port, the state oil company said.
[ID:nN14207657]
                                
 On Thursday, traders will watch for weekly U.S. inventory
data, with analysts calling for a 1.9 million barrel build in
crude stocks, a 600,000 barrel build in distillates and a 2.9
million barrel rise in gasoline inventories. [EIA/S]
 (Reporting by Chua Baizhen; Editing by Michael Urquhart)