* Fall in US equities on market open hits oil price
* Chinese economic growth slows in Q2
* For a technical view, click: []
(Changes headline, updates throughout)
By David Turner and Emma Farge
LONDON, July 15 (Reuters) - Oil reversed earlier gains to
fall below $76 a barrel on Thursday after falls in U.S. equities
and weak macroeconomic data curbed expectations for future
demand growth in the world's largest oil consumer.
By 1416 GMT front-month U.S. crude <CLc1> was trading down
$1.50 at $75.54 a barrel, after earlier jumping to $77.66. ICE
Brent <LCOc1> was down $1.25 at $75.52 a barrel.
Eugen Weinberg of Commerzbank said the oil markets "are
being driven by sentiment and macro indicators", rather than
"the demand and supply" of oil.
By 1349 GMT the S&P 500 was down more than 1 per cent on the
day at 1,081.52. <.SPX>
The sudden fall in oil prices reversed earlier rises, that
had gained further traction on the 1315 GMT news that US
industrial output had beaten consensus forecasts by eking out a
0.1 per cent month on month rise. []
But they later extended losses after factory growth in the
U.S. Mid-Atlantic region fell unexpectedly this month.
[]
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For a graphic on oil's correlation with equities/euro:
http://graphics.thomsonreuters.com/gfx/ABE_20101407131104.jpg
For a graphic showing the technical outlook:
http://graphics.thomsonreuters.com/gfx/WT_20101507083551.jpg
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News during Asian trading that China's economic growth
cooled to 10.3 percent in the second quarter in a slowdown that
is likely to extend over the rest of the year, continued to
exert countervailing downward pressure on prices.
[]
The doubling of oil prices from the late 2008 trough below
$40 a barrel is widely attributed to improving fuel demand led
by Asia, as the global economy pulls out of recession.
Anything seen as a risk to this narrative, such as the
latest macroeconomic data out of China, tends to dampen
sentiment in the oil market.
Earlier this week, oil prices looked set to breach a
critical technical resistance level -- the 200-day moving
average near $78.50 a barrel -- in a move that some thought
would take oil into a new trading range straddling $80 a barrel.
But signs of weaker growth have since doused sentiment and
technical analysts now see oil trading in a tight band between
$76-$78 a barrel before pulling back to the low $70s.
Stocks data from the U.S. Energy Information Administration
on Wednesday were widely viewed as neutral for the oil market.
A near 5 million barrel drop in crude oil was countered by
larger-than-expected product builds as refiners boosted rates
above 90 percent. []
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Alison Birrane)
