* Slip in U.S. consumer sentiment hits oil market
* Fall in US consumer prices suggests sluggish demand
* Hurricane Center sees 10 pct chance of storm forming
(Recasts, updates prices, changes dateline formerly
LONDON)
By Brian Ellsworth
NEW YORK, July 16 (Reuters) - Oil slipped below $76 a
barrel on Friday dropping alongside equities markets as weak
U.S. consumer sentiment and falling consumer prices lowered
investor appetite for risk.
Data released on Friday showed U.S. consumer prices fell
for a third straight month while consumer sentiment tumbled to
an 11-month low, helping push down both oil and equities.
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Falling consumer prices can be a sign that an economy is in
deceleration, which would reduce demand for oil. Low consumer
sentiment implies less consumer demand for goods and services,
which would likewise hurt oil demand.
U.S. crude for August <CLc1> fell 90 cents to $75.72 a
barrel by 11:25 a.m. EDT (1525 GMT), after touching an
intra-day high of $77.15.
London Brent's new front-month September crude oil futures
contract <LCOc1> was down 86 cents to $75.23.
"It's really the demand side story that is driving
the-day-to day price swings," said Tim Evans, energy analyst
for Citi Futures Perspective. "The thing that is directing
traffic here for the oil market is whether the S&P is up or
down."
Oil was on track to log a modest weekly decline from the
week of July 9, when oil settled up 5.5 percent to $76.09.
The S&P 500 and the Dow Jones industrial average were both
down close to 2 percent in morning trading, spurred by
lackluster earnings and the sluggish economic data.
That data overshadowed a decline in the U.S. dollar, which
is usually bullish for crude because it makes oil cheaper for
buyers that hold other currencies.
Traders also shrugged off a U.S. National Hurricane Center
statement that an oceanic weather system in the central
Caribbean had a 10 percent chance of strengthening into a
tropical cyclone over the next two days.
It was days away from potentially entering the oil-rich
Gulf of Mexico.
U.S. crude prices have traded in a range between $71 and
$80 a barrel for almost six weeks as volatility related to the
European debt crisis dwindled. This week they have found
support near the $75 per barrel range.
"Near-term crude fundamentals continue to look supportive
as refinery runs remain on the rise, particularly in Asia
following seasonal maintenance," said J.P. Morgan in a research
note.
Over the year, prices have stayed within a $23 span,
hitting a 19-month peak above $87 and a trough below $65, both
in May.
For a technical view, click []
(Additional reporting by Robert Gibbons in New York, David
Turner and Joe Brock in London and Alejandro Barbajosa in
Singapore; Editing by Alden Bentley)
