Oil prices fell more then $1 per barrel on Friday, retracing after sharp gains, on signs economic growth in the world's top two oil consumers may not be as rapid as expected.

A Chinese central bank adviser said on Friday economic growth was expected to slow in the second half of this year and that double-digit growth for the full year seemed unlikely.

The warning, which prompted a sell-off in Chinese equities, followed U.S. data on Thursday showing jobless claims increased unexpectedly last week as the manufacturing, construction and education sectors shed workers.

Factory activity growth braked to its slowest pace in 10 months in the U.S. Mid-Atlantic region in June, raising concerns that an anemic U.S. economic recovery was faltering.

U.S. light crude oil futures for July were down $1.14 per barrel at $75.65 by 1041 GMT, after hitting an intra-day low of $75.56.

The front-month North Sea Brent futures contract, now August, dropped $1.40 per barrel to a low of $77.28 before recovering slightly to trade around $77.32 by 1041 GMT.

July U.S. light crude futures expire on June 22.

Oil prices are up by around 2.5 percent this month but that overall gain masks a period of relatively volatile prices.

Front-month U.S. crude oil futures have risen almost 19 percent since hitting an intra-day low of almost $64 on May 20. Prices are still more 12 percent below a 19-month intra-day high above $87 hit on May 3.

Front-month Brent futures, now August, have weathered the weak U.S. economic statistics better, supported by easing concern about Spain's sovereign debt woes.

Oil is consolidating a little after some very substantial gains, said Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt. It is natural that prices moderate somewhat after big moves.

RISING DEMAND, INVENTORIES

Overall oil product demand in the United States advanced by 1.9 percent in the past four weeks from a year earlier, the Energy Information Administration said this week. Distillate use jumped almost 14 percent in the same period.

Crude oil stockpiles at Cushing, Oklahoma, the pricing point for U.S. benchmark oil futures, also known as WTI, rose 200,000 barrels to 37.6 million barrels last week according to the EIA, putting extra pressure on U.S. crude prices.

But longer term, many analysts see potential upside.

Christophe Barret, oil analyst at Credit Agricole in London, said a front-month price for WTI of between $75 and $80 looks reasonable. He said he expected prices to rise in the third quarter as global economic demand picked up.

Some analysts argue oil fundamentals could tighten in future and say the Gulf of Mexico spill may curb potential supply.

The head of the International Energy Agency, Nobuo Tanaka, told Reuters on Friday that 800,000 to 900,000 barrels per day of global offshore oil output could be cut by 2015 if there were to be an extended global moratorium on new drilling similar to that seen in the U.S. Gulf of Mexico.

Washington has banned deepwater drilling for six months and may also introduce legislation to curb fuel consumption as a response to the environmental disaster caused by the spill.

U.S. lawmakers accused BP (BP.L) Chief Executive Tony Hayward of evasion and ducking responsibility for the worst oil spill in U.S. history when he appeared before them on Thursday to answer charges his company cut corners on its blown-out Gulf of Mexico well.

Prices of long-dated WTI, including contracts for delivery in December 2018, the farthest available, have remained relatively steady around $95 since BP's Deepwater Horizon explosion on April 20.

(Additional reporting by Alejandro Barbajosa in Singapore; editing by Anthony Barker)

Manufacturing Commerzbank