* Dollar rises, shares drop on European worries
* Only 6 pct U.S. Gulf of Mexico oil output still shut
* Coming up: API oil inventory data, 4:30 p.m. EDT Tuesday (Updates prices, market activity through Brent settlement)
By Robert Gibbons
NEW YORK, Sept 9 (Reuters) - Oil prices fell on Friday as the euro and equities tumbled on increasing gloom over economic growth and reinforced worries about Europe's debt problems.
Despite the day's losses, Brent and U.S. crude futures posted small gains for the week. Prices rose earlier in the week on tropical weather threats to U.S. output and a ruling by Germany's top court briefly soothed euro zone debt fears.
The euro fell to a 6-1/2-month low against the dollar as risk aversion increased on news that a member of the European Central Bank's Executive Board will step down due to a conflict over controversial ECB bond-buying. [USD/] [ID:nF9E7JT009]
The dollar index <.DXY>, measuring the greenback against a basket of other currencies, gained more than 1 percent.
Dollar strength can pressure oil by making it less affordable for consumers using other currencies and by attracting investment to markets offering better returns.
U.S. stocks tumbled more than 2 percent as the ECB news reinforced concerns about the region's debt and as investors remained skeptical about how much of U.S. President Barack Obama's $447 billion proposal to generate jobs would make it through Congress. [.N]
"Worries about the economy are resurfacing. Oil is tracing the plunging equity markets and strong dollar," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
ICE Brent October crude
Brent fell under its 100-day moving average at $114.22 and the 60-day MA of $112.69, according to Reuters data, but bounced back ahead of its 30-day MA at $110.68.
U.S. October crude
The Brent premium to its U.S. counterpart
Brent trading volume was 23 percent above the 30-day average and slightly outpaced U.S. crude volume that was 15 percent below its 30-day average.
Speculators cut their net long U.S. crude oil futures and options positions in the week to Sept. 6, the U.S. Commodity Futures Trading Commision said. [ID:nEMS1ISDUN]
U.S. gasoline
Also bearish for oil, especially Brent, was news that about 2 million barrels of Libyan crude have been offered via a tender, the largest volume to come to market since civil war erupted in February. [ID:nL5E7K92HJ]
ECONOMIC GROWTH WORRIES
The increasing recession fears ramp up the pressure on G7 finance chiefs meeting on Friday to take action to revive economic growth. [ID:nN1E78728T]
International Monetary Fund chief Christine Lagarde on Friday urged policymakers to use all available tools to fuel growth. [ID:nL5E7K90Q2]
The G7 meeting and Lagarde's remarks followed the Organization for Economic Cooperation and Development saying on Thursday that the outlook for growth in developed countries has worsened in the last three months. [ID:nL5E7K8194]
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a 24-hour technical outlook on Brent:
http://graphics.thomsonreuters.com/WT1/20110909090457.jpg
For a 24-hour technical outlook on US crude:
http://graphics.thomsonreuters.com/WT1/20110909085318.jpg
For analyst view on Obama's speech: [ID:nN1E78518T]
Reuters hurricane tracker: http://r.reuters.com/san78n
Factbox on U.S. Gulf energy operations impacted by storms:
[ID:nN1E7880QG]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
WEATHER UNCERTAINTY
Oil investors continued to eye Tropical Storm Nate in the Bay of Campeche and Tropical Storm Maria in the Atlantic. Nate could reach hurricane strength on Saturday. [ID:nL3E7K92YP]
Oil companies continued to restore Gulf of Mexico production shut because of Tropical Storm Lee. A little more than 6 percent of crude oil output remained shut on Friday, according to a U.S. government report. [ID:nEIA001026P] (Additional reporting by Selam Gebrekidan, Jeffrey Kerr, Gene Ramos in New York and Simon Falush in London; Editing by Marguerita Choy)