* Hurricane Center sees 10 pct chance of two storms forming
* Coming Up: U.S. Univ Michigan sentiment index Jul; 1355
GMT
* For a technical view, click: []
(Recasts with price fall, adds Brent contango)
By Alejandro Barbajosa
SINGAPORE, July 16 (Reuters) - Oil slipped towards $76 on
Friday as stock markets in Asia fell following disappointing
U.S. economic indicators, while potential Atlantic storms
provided some support to prices.
Japan's Nikkei average shed 2.2 percent on Friday, after
reports showing U.S. industrial production slowed sharply last
month and manufacturing output snapped a three-month streak of
increases capped Wall Street gains on Thursday.
But there was some positive economic news as U.S. claims
for jobless benefits tumbled to a near two-year low last week.
[]
Two oceanic weather systems, one in the central Caribbean
and the other one in the mid-Atlantic, had a 10 percent chance
of strengthening into tropical cyclones over the next 48 hours,
according to the U.S. National Hurricane Center. Both were days
away from potentially entering the oil-rich Gulf of Mexico.
"Given that the economic outlook is mixed, the key will be
the weather as we head into the hurricane season," said
Jonathan Barratt, managing director at Commodity Broking
Services in Sydney, adding that prices could reach $80 as soon
as next week.
U.S. crude for August <CLc1> fell 20 cents to $76.42 a
barrel at 0439 GMT, extending Thursday's slide of more than 0.5
percent. Over the week, the contract was just trading a few
cents higher.
Prices have traded in a range between $71 and $80 for
almost six weeks as volatility related to the European debt
crisis dwindled. Over the year, they have stayed within a $23
range, hitting a 19-month peak above $87 and a trough below
$65, both in May.
The market's attention will be on U.S. consumer prices and
the Reuters-University of Michigan sentiment index due out
later on Friday.
CONTANGO RETURNS
ICE Brent for September <LCOc1>, the front-month contract
after August expired on Thursday, fell 25 cents to $75.84. As
August went off the board, the Brent market returned to a
contango structure.
Brent futures earlier this week had flipped into
backwardation, largely reflecting a drop in supply of North Sea
crude grades in August because of oilfield maintenance,
analysts said, rather than a tightening of the global market.
[]
Oil fell on Thursday after China, which is leading global
demand growth as the world's second-largest oil consumer, said
annual gross domestic product growth moderated to 10.3 percent
in the second quarter from 11.9 percent in the first quarter.
"The slowdown in China's economy would have been the
telltale sign for the price to move lower, but the market has
absorbed it," Barratt said. "Given the state of the economy,
inventories will continue to be drawn."
U.S. crude inventories fell about 5 million barrels for the
second week in a row last week, government statistics showed
two days ago. []
But Energy industry data provider Genscape on Thursday said
crude stockpiles at the key U.S. Cushing, Oklahoma oil hub, the
pricing point for crude trading on the New York Mercantile
Exchange (NYMEX), rose in the week to July 13 to 39.93 million
barrels. []
BP Plc <BP.L> <BP.N> said on Thursday it stopped the flow
of oil into the Gulf of Mexico from its deep-sea well for the
first time since it ruptured in April, prompting hope that the
leak can be plugged for good. []
The U.S. Congress on Thursday approved the broadest
overhaul of financial rules since the Great Depression and sent
it to President Barack Obama to sign into law. []
(Editing by Michael Urquhart)
