* Fundamentals, financial outlook point to lower prices * Brent may fall towards $110 -technicals * Coming Up: U.S. industrial output data for Aug; 1315 GMT (Updates prices) By Alejandro Barbajosa SINGAPORE, Sept 15 (Reuters) - Oil fell on Thursday as rising fuel stocks and falling demand in top consumer the United States reinforced fears that crumbling economic growth and Europe's debt crisis would dent energy use, while a stronger dollar pressured prices. Brent crude LCOc1 for November, the front month once the less liquid October contract expires later on Thursday, slid 8 cents to $109.57 a barrel by 0643 GMT. At $112.32, front-month Brent is down 12 percent from this year's peak above $127. U.S. crude CLc1 fell 38 cents to $88.53, while the dollar rose about 0.1 percent against a basket of currencies. Europe's debt crisis is chipping away at confidence and capping any oil rally. The continent's finance ministers have been warned confidentially of the danger of a renewed credit crunch as a "systemic" crisis in euro zone sovereign debt spills over to banks. "The concern is that what starts as a financial crisis will drive the cost of borrowing to levels where it is difficult for the corporate world to invest, depressing economic activity and putting pressure on oil," said Michael McCarthy, chief markets strategist at CMC Markets in Sydney. "The dollar is also a key driver." European stock index futures rose on Thursday, following a bounce in Asia, on signs that European policymakers are taking tentative steps to tackle a crippling debt crisis, but the euro slipped amid scepticism that a Greek default can be avoided. World Bank President Robert Zoellick said on Wednesday the world had entered a new economic danger zone and Europe, Japan and the United States all needed to make hard decisions to avoid dragging down the global economy. Debt problems in the European Union are raising the risk to a bullish outlook for commodities, a Goldman Sachs economist said on Thursday. Still, "we need to see a more global recessionary event to meaningfully derail this commodities view," Allison Nathan, a senior commodities economist, said in Singapore. RISING FUEL INVENTORIES Reflecting slowing growth, U.S. total oil product demand over the past four weeks fell 0.9 percent from a year earlier, while gasoline use over the summer declined to an eight-year low, the Energy Information Administration said on Wednesday. Gasoline stocks last week rose 1.9 million barrels, compared with analyst projections for a 500,000-barrel decline, while average demand for the motor fuel in the last four weeks fell 2.7 percent from year-ago levels, the EIA said. Distillates, which include heating oil and diesel, rose 1.7 million barrels, versus an average forecast for a 700,000-barrel gain. Traders paid little attention to the biggest weekly drop in crude stockpiles this year, a 6.7-million-barrel decline, which came on the back of disruptions caused by Tropical Storm Lee. That left inventories at their lowest level since February. Libyan crude has returned to the spot market as Vitol is offering 1 million barrels for early-October loading into the Mediterranean, trade sources said on Wednesday. Brent's premium over U.S. crude CL-LCO1=R benchmark West Texas Intermediate (WTI) was little changed at about $23.50 a barrel, down from a record above $27 on Sept. 6 on prospects of increasing production from Libya after Muammar Gaddafi's government was overthrown. (Editing by Clarence Fernandez)

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