* U.S. finalizes deal to raise debt limit
* Concerns remain about weak economic indicators
* Coming up: EIA oil data; 10:30 a.m. EDT Wednesday (Updates stock market result, API data, additional detail paragraphs 7-10, 12-17 and 23-24)
By Robert Gibbons
NEW YORK, Aug 2 (Reuters) - Oil prices fell on Tuesday as more weak U.S. economic data fueled concern about the economy even as Congress passed a U.S. debt-cutting measure in time to avoid a default for the world's top oil consumer.
Congress passed a deficit-cutting package that also raised the nation's borrowing limit, but ending the debt-ceiling row for the 2012 election cycle did not remove the possibility of a credit-rating downgrade. [ID:nN1E77111G]
"The passing of the U.S. debt-ceiling bill should already be priced into oil markets. Markets are more concerned about the recent trend of weaker economic data," said Tom Bentz, director at BNP Paribas Commodity Futures.
A stronger dollar index <.DXY> also helped pressure dollar-denominated oil prices.
Brent crude's losses were limited by North Sea supply
disruptions, Libya's crude oil exports lost to civil war and a
fire at a refinery in Taiwan that also was supportive to gas
gas oil
ICE Brent crude for September
U.S. September crude
Technical analysts said U.S. crude could face downside pressure after breaking below the 200-day moving average on Monday.
"We see a larger cluster of potential support stretching from $92.96 to $92.48 to $91.96," said Brian Larose, analyst at United-ICAP in Jersey City, New Jersey.
"If the zone can provide support, WTI would have the ability to recover most, if not all, of this past week's losses," he said.
The trading volatility allowed Brent's premium to U.S.
crude
Crude trading volumes stayed relatively thin, slipping from Monday and remaining below 30-day averages for Brent and U.S. crude. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ANALYSIS-No fool's rally seen in commods on US debt fix: [ID:nL6E7J110I] Graphic on global PMI data http://r.reuters.com/paz82s Full coverage of U.S. budget and debt [ID:nUSBUDGET] FACTBOX-Elements of US debt deal [ID:nN1E76T0AF] Graphics package http://r.reuters.com/nud82s Go long energy in correction-Kozey
http://link.reuters.com/byb92s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
API REPORTS LOWER CRUDE STOCKS
Late on Tuesday, the industry group American Petroleum Institute said U.S. crude inventories fell 3.3 million barrels last week, against a forecast rise, helping crude futures pare post-settlement losses. [API/S]
Gasoline stocks jumped 2.5 million barrels and distillate stocks rose 1.4 million barrels, according to the API.
Ahead of the API report, U.S. crude stocks were expected to be up 900,000 barrels, a Reuters analyst survey showed, with supplies from the Strategic Petroleum Reserve seen offsetting any losses related to Tropical Storm Don. [EIA/S]
Gasoline stockpiles were projected to be up slightly, by 100,000 barrels, while distillate stocks were expected to be up 1.5 million barrels.
Inventory statistics from the U.S. government's Energy Information Administration will follow on Wednesday.
U.S. retail gasoline demand fell 3.1 percent in the week to July 29 from a year earlier, while posting a 0.1 percent rise from the previous week, as price gains since the beginning of July weighed on consumption, MasterCard said. [ID:nN1E7711G5]
As oil companies continued to restart Gulf of Mexico operations halted last week by the now-departed Tropical Storm Don, a new threat, Tropical Storm Emily, simmered over the Caribbean. [ID:nN180088]
WEAK ECONOMIC DATA
Oil prices felt pressure on Tuesday from a report showing U.S. consumer spending dropped in June for the first time in nearly two years and incomes barely rose. [ID:nN1E7710A7]
That data followed Monday's weak manufacturing figures from the United States, Europe and China and last week's disappointing second-quarter U.S. GDP estimate that reinforced fears that slowing economic growth threatens to dampen oil demand.
"The debt-ceiling distraction may now be behind the markets, but the damage has been done," said John Kilduff, partner at Again Capital LLC in New York.
The key U.S. nonfarm payrolls report for July looms on Friday.
The S&P 500 turned negative for the year as worries about the economy outweighed relief over avoiding a U.S. default. The S&P 500's seventh straight lower finish was its longest down streak since October 2008. [.N] (Additional reporting by Gene Ramos in New York, Zaida Espana in London and Alejandro Barbajosa in Singapore; Editing by Marguerita Choy and Dale Hudson)