* 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 prices, volume through U.S. settlement, paragraphs 5-11)
NEW YORK, July 29 Oil prices fell on Friday, headed for a weekly loss after a report showed weak U.S. economic growth and as Congress kept wrangling ahead of the Aug. 2 deadline to to raise the government debt ceiling and avoid default.
The U.S. economy stumbled in the first half, according to Commerce Department data that showed a weaker-than-expected 1.3 percent growth rate 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 LCOU1 fell 66 cents to $116.70 a barrel by 3 p.m. (1900 GMT), after falling as low as 115.75.
U.S. September crude CLU1 fell $1.74 to settle at $95.70 a barrel, the lowest close in two weeks and with the $94.95 intraday low just above the 200-day moving average of $94.88 a barrel.
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.
U.S. gasoline RBc1 and heating oil HOc1 futures also slipped on Friday as front-month August contracts expired.
Trading volumes remained tepid, with Brent and U.S. crude volumes both below 30-day averages.
Friday's choppy trading allowed Brent's premium to U.S. crude CL-LCO1=R to push above $21 intraday.
The Reuters-Jefferies CRB index .CRB, a global commodities benchmark fell 0.7 percent as investors fretted over the U.S. economy and the likelihood of default.
U.S. stocks fell, but pared losses after the S&P 500 briefly fell below its own 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.
Graphic showing eurozone sovereign ratings vs CDS prices:
Factbox on storm-hit Gulf of Mexico output [ID:nN1E76S0MI]
Reuters Storm Tracker link.reuters.com/san78n
Full coverage of U.S. budget and debt [ID:nUSBUDGET]
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]
Tropical Storm 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 during 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 and Sofina Mirza-Reid)