* Weak U.S. Q2 GDP estimate weighs on oil prices
* U.S. debt-limit row, euro zone debt woes pressure oil
* Coming up: API oil inventory data, 4:30 p.m. EDT Tuesday (Updates with Brent settlement, CFTC data, paragraphs 5, 10)
By Robert Gibbons
NEW YORK, July 29 (Reuters) - Oil prices fell on Friday, posting a weekly loss after data showed weak U.S. economic growth and as Congress kept wrangling before an Aug. 2 deadline to raise the government debt ceiling and avoid default.
The U.S. economy stumbled in the first half, according to a Commerce Department report that showed a weaker-than-expected 1.3 percent expansion in the second quarter. [ID:nCAT005481]
"The slowdown in second-quarter economic activity has been confirmed, and the reading will add to concerns about the remainder of the year," said John Kilduff, partner at Again Capital LLC in New York.
Two other reports showed business activity in the U.S. Midwest grew less than expected this month as the labor market weakened, while U.S. consumer sentiment fell in July to its lowest point in more than two years. [ID:nN9E7ID003] [ID:nN1E76S08H]
ICE Brent crude for September
U.S. September crude
U.S. crude fell 4.2 percent for the week, snapping a string of four weekly gains. For the month, front-month crude managed a 28-cent gain.
Crude futures trading volumes remained tepid, with Brent and U.S. crude turnover well below 30-day averages.
U.S. gasoline
Money managers raised net long U.S. crude futures and options positions in the week to Tuesday and posted a sharp rise in the Intercontinental Exchange's look-a-like U.S. crude contract, the U.S. Commodity Futures Trading Commission said. [ID:nN1E76S1PO]
Friday's choppy trading allowed Brent's premium to U.S.
crude
The Reuters-Jefferies CRB index <.CRB>, a global commodities benchmark, fell 0.75 percent, the biggest loss in two weeks.
U.S. stocks fell, but pared losses after the S&P 500 briefly dipped below its 200-day moving average. [.N]
Europe's sovereign debt problems remained in focus as ratings agency Moody's put Spain on review for a possible downgrade. [ID:nLDE76S04W]
Moody's action was significant for markets because "Spain is a big country. Greece is a small country -- we can bail them out, but Spain is another story," Thorbjorn Bak Jensen, analyst at Global Risk Management, said.
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Graphic showing euro zone sovereign ratings vs CDS prices:
http://link.reuters.com/bes82s
Factbox on storm-hit Gulf of Mexico output [ID:nN1E76S0MI]
Reuters Storm Tracker http://link.reuters.com/san78n
Full coverage of U.S. budget and debt [ID:nUSBUDGET]
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STORM IMPACT SEEN LIMITED
A day after producers started reducing oil and natural gas output in the Gulf of Mexico as Tropical Storm Don headed toward the Texas coast, some production platforms were being restaffed. [ID:nWEN6505]
Don is expected to hit the Texas coast late on Friday or on Saturday, the U.S. National Hurricane Center said. [ID:nEMS4TKKG6]
Nearly 12 percent of U.S. Gulf of Mexico crude output remained shut on Friday, according to government data, but analysts believe the storm's relative weakness and projected path made prolonged production outages or energy infrastructure damage unlikely. [ID:nEIA001020]
A tropical wave accompanied by a well-defined low-pressure system in the central Atlantic had a medium, 30 percent chance of becoming a tropical cyclone in the next 48 hours, the NHC said. [ID:nL3E7IT3BG] (Additional reporting by Gene Ramos in New York, Claire Milhench in London and Florence Tan in Singapore; Editing by David Gregorio, Sofina Mirza-Reid and Dale Hudson)