* U.S. crude inventories fall, products rise - EIA
* U.S. retail sales fall more than expected in June
* Crude faces resistance at 200-day moving average
(Recasts with U.S. inventory report, updates prices)
By David Turner and Alex Lawler
LONDON, July 14 (Reuters) - Oil eased to around $77 a barrel
on Wednesday, falling from a two-week high, after a U.S.
government report showed rising fuel supplies and declining
retail sales weighed on equities.
Gasoline inventories rose 1.6 million barrels and
distillates by 2.94 million barrels, the Energy Information
Administration said, more than expected. Crude stocks fell a
more than expected 5.06 million barrels. []
"Of course the drop in crude stocks is a bullish factor, but
that may be somewhat offset by builds in products," said Gene
McGillian, analyst at Tradition Energy in Stamford, Connecticut.
"For the crude market, this probably isn't a game-changer. I
expect we will continue to track equities markets."
U.S. crude <CLc1> fell 20 cents to $76.95 at 1506
GMT, retreating from a two-week intraday high of $77.37 on
Tuesday. Brent crude <LCOc1> was down 8 cents to $76.57.
The EIA report rleased at 1430 GMT told a different story
to that of industry group the American Petroleum Institute,
which on Tuesday said U.S. crude stockpiles rose by 1.7 million
barrels.
Oil also fell as U.S. equities wavered after six sessions of
gains after data showed a second straight month of declining
U.S. retail sales, though results from Intel Corp helped limit
losses on the Nasdaq. []
Crude and U.S. equities have become more closely correlated
this month. Investors often see the strength of equities as an
indication of wider economic health and future demand for oil
and energy.
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For a graphic on oil's correlation with equities and the
euro:
http://graphics.thomsonreuters.com/gfx/ABE_20101407131104.jpg
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Oil in New York was just below its 200-day moving average of
$77.39. Technical analysts, who study past price moves to
predict future direction, said this was acting as a bulwark that
was proving difficult to breach.
But they added that if oil went above this level, it would
draw strength from having surpassed it.
"The line to conquer for the bulls today will be the
resistance of the 200-day moving average," said Olivier Jakob of
Petromatrix in Zug, Switzerland.
He added: "We continue to believe that sustainability above
$80 will be difficult until (there is) a true visible change in
the fundamental data."
(Additional reporting by Alejandro Barbajosa; editing by
Anthony Barker)
