UPDATE 7-Oil falls below $58 on dollar, weak demand

                                
 * Dollar rises slightly
                                
 * US CPI, production data point to easing recession
                                
 * European GDP contracts 2.5 percent, worse than forecast
 (Updates prices, adds quotes, European GDP, changes dateline
from LONDON)
                                
 NEW YORK, May 15 (Reuters) - Oil fell below $58 a barrel on
Friday, pressured by weak global demand and by gains in the
U.S. dollar against the euro.
                                
 U.S. crude <CLc1> for June delivery fell 99 cents to $57.63
a barrel by 12:00 p.m. EDT (1600 GMT), off an earlier low of
$57.14. London Brent <LCOc1> for July fell 83 cents to $57.76
in its first session of trade as the front-month contract.
                                
 The U.S. dollar was slightly up against a basket of major
currencies, having risen earlier following weak German economic
data. [USD/] A stronger dollar can limit investor demand for
oil and other commodities.
                                
 Some support came after data showed U.S. consumer prices
were unchanged in April from March and industrial output
declined at a slower pace, providing more evidence that the
worst phase of the recession may be over. [ID:nTOPWRAP]
                                
 "Crude futures are trading in range, though above session
lows, as the economic data we've seen today is a mixed bag with
U.S. industrial production falling but at a lower pace, which
means it is not as bad as it could have been and that
corroborates recent data we've seen," said Brad Samples,
analyst for Summit Energy in Louisville, Kentucky.
                                
 "On the other hand, European data shows worse than expected
first quarter GDP, and that's bearish, particularly for
distillates as that is the biggest market for those products."
                                
 Europe sank to what may have been the recession's low point
in the first quarter of this year, with GDP down 2.5 percent,
the worst contraction since records at the European level began
in 1995. [ID:nLF932259]
                                
 U.S. oil hit a six-month high above $60 a barrel on
Tuesday, before weak demand outlooks halted the recent rally.
                                
 The International Energy Agency said on Thursday world oil
demand this year will post the sharpest annual decline since
1981 as the economy struggles to bounce back. [ID:nLE886831]
                                
 Demand will contract by 2.56 million barrels per day (bpd)
in 2009, the IEA, which advises 28 industrialized countries,
said in a monthly report.
                                
 This came a day after the Organization of the Petroleum
Exporting Countries (OPEC) said global oil demand would drop
1.57 million bpd in 2009 to average 84.03 million bpd.
                                
 Despite falling demand for oil, OPEC, which has announced
4.2 million bpd of production cuts since September in a bid to
tighten the market, also pumped more oil last month than in
March, the IEA said.
                                
 OPEC members' compliance with production quotas fell to 78
percent in April from 83 percent a month earlier. The group
meets on May 28 in Vienna to set supply policy.
                                
 Renewed unrest in Nigeria, Africa's biggest oil producer,
offered support for prices.
                                
 Nigerian militants have hijacked two cargo ships in the
Niger Delta and given oil companies until Saturday to evacuate
staff, warning they would attack helicopters and planes after
the deadline, after heavy clashes with the military.
[ID:nLE629291]
 (Editing by Jim Marshall)