UPDATE 7-Oil off 2-week high as economic data disappoints

                                
 * U.S. equities, euro slip on weak data, weighs on oil
                                
 * Midwest business barometer slips weighs on markets
                                
 * Coming up: ISM manufacturing index, June 1, 10 a.m. EDT
                                
 (Recasts, updates prices, changes byline and dateline
previous LONDON)
                                
 NEW YORK, May 28 (Reuters) - U.S. crude oil futures slipped
on Friday in volatile trading, retreating after hitting a
two-week high above $75 after disappointing U.S. economic data
made investors more cautious on a range of riskier assets.
                                
 U.S. crude futures for July delivery <CLc1> at 11:52 a.m.
EDT (1552 GMT) were down 3 cents at $74.52 a barrel, after
earlier jumping to a $75.72 high  and having slumped intraday
as low as $73.86. London's ICE Brent crude <LCOc1> was down 5
cents at $74.61.
                                
 The expiration of U.S. June refined products futures
contracts was expected to add to volatility on Friday.
                                
 U.S. consumer spending was unexpectedly flat in April, but
real disposable incomes had their biggest increase in nearly a
year, a Commerce Department report said. [ID:nN28167458]
                                
 U.S. stocks opened lower on faltering consumer spending and
extended losses after the Institute for Supply
Management-Chicago said its index of Midwest business activity
fell in May. [.N]
                                
 Business activity in the U.S. Midwest grew less than
expected in May as employment declined, the ISM-Chicago report
said. [ID:nN28179473]
                                
 U.S. consumer sentiment rose slightly in May from April but
stayed near levels reported since February, while the one-year
inflation expectations climbed to the highest since October
2008, a Thomson Reuters/University of Michigan's Surveys of
Consumers report said. [ID:nN28181156]
                                
 "The Chicago PMI has knocked most markets," said Eugen
Weinberg, commodities analyst at Commerzbank in Frankfurt. "All
the commodities that worry about risk have softened -- oil,
metals, and so have equities."
                                
 Earlier on Friday, crude futures were up sharply as global
equities rose a third consecutive day and the euro edged up
against the dollar. The euro later slipped against the dollar
in choppy trading on the weak economic data. [USD/]
                                
 Oil prices have been extremely volatile in May. U.S. crude
hit an intraday low of $64.24 on May 20 ahead of the expiry of
the June futures contract, almost $23 below its peak at $87.15
on May 3, its level highest for 19 months.
                                
 This volatility has left investors cautious, though some
oil traders argue the market may have found a floor.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic of U.S. crude oil futures benchmark over the last year:
http://link.reuters.com/nuv86k
Graphic of crude vs euro/dollar:http://link.reuters.com/duw86k
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>    A Reuters survey on Friday showed the Organization of the
Petroleum Exporting Countries's crude oil supply has risen in
May to the highest in 17 months, suggesting this month's slide
in prices has yet to spur closer adherence to agreed output
targets. [ID:nWLA5200]
                                
 OPEC target compliance was estimated at 51 percent. OPEC's
crude oil basket price rose to $70.48 a barrel on Thursday from
$68.21 on Wednesday, OPEC said. [ID:nLDE64R0FD]
                                
 Traders are keeping an eye on forecasts for the Atlantic
hurricane season that have revived concerns of disruption to
supplies in the Gulf of Mexico, where BP's <BP.L> attempt to
plug a gushing oil well continued.
                                
 In its first outlook for the hurricane season that begins
in June, the U.S. National Oceanic and Atmospheric
Administration forecast 14 to 23 named storms, with eight to 14
turning into hurricanes, nearly matching 2005's record of 15.
[ID:nN2798815]
                                
 Hurricanes Katrina and Rita devastated offshore oilfields
and refineries on the Gulf Coast in 2005, causing the most
severe disruption to U.S. supplies from a natural disaster.
                                
 The coming Memorial Day weekend is the traditional start of
the U.S. summer driving season, when motor fuel demand usually
increases.
                                
 U.S. diesel demand for trucking and industry is rising, a
weekly government report showed on Wednesday.
                                
 Oil demand in the U.S. climbed almost 7 percent over the
past four weeks, the U.S. Energy Information Administration
said, led by a 16 percent jump in demand for distillates, a
category that includes diesel and heating oil.
 (Additional reporting by Christopher Johnson in London and
Alejandro Barbajosa in Singapore; Editing by Marguerita Choy)