Oil holds below $77, eyes equities, hurricanes

                                
   * 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: [ID:nSGE66F00J]
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, July 16 (Reuters) - Oil steadied below $77 on
Friday, shedding early gains as stock markets in Asia fell
following disappointing U.S. economic indicators, while
potential Atlantic storms provided some support to prices.
                                
 U.S. industrial production slowed sharply last month, while
manufacturing output snapped a three-month streak of gains, a
report showed on Thursday, capping Wall Street gains. Japan's
Nikkei average shed 0.7 percent on Friday.
                                
 But new U.S. claims for jobless benefits tumbled to a near
two-year low last week. [ID:nN15196157]
                                
 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> edged 5 cents higher to $76.67
a barrel at 0252 GMT, after sliding more than 0.5 percent on
Thursday. It was still heading for a second straight weekly
gain.
                                
 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.
                                
 ICE Brent for September <LCOc1>, the front-month contract
after August expired on Thursday, gained 1 cent to $76.10.
                                
 Oil yesterday fell 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. [EIA/S]
                                
 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. [ID:nN15216384]
                                
 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. [ID:nLDE66E0MK]
                                
 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. [ID:nN15226910]
 (Editing by Michael Urquhart)