* IEA: Global oil demand to bounce back in 2010

* Wall Street set to fall on earnings jitters, oil

* Euro falls against U.S. dollar

* U.S. May trade gap narrows to lowest since 1999

NEW YORK, July 9 (Reuters) - U.S. crude oil futures dropped on Friday, hitting the lowest level since mid-May, as the latest forecast from the International Energy Agency stirred more worries about oil demand.

Global oil demand will rebound 1.7 percent next year, but the demand outlook for this year was "effectively unchanged," -- down 2.9 percent, or 2.5 million bpd compared with last year, the Paris-based International Energy Agency, adviser to 28 industrialized nations, said in its latest monthly forecast. [IEA/M]

David Fyfe, head of the IEA's oil industry and market division, said the extent of recovery in world oil demand would rest on the performance of the global economy and prices.

Wall Street was poised for a lower open on Friday after Chevron warned about second-quarter earnings, raising the specter of a weaker-than-expected second-half economic recovery and anemic corporate profits. [.N]

The euro fell 1 percent against the dollar as the New York session opened. [USD/]