* U.S. factory, wholesale price data flag economy's woes
* U.S. crude stocks fall from record highs, gasoline up -EIA
* Brent oil to drop to $102.50 - technicals
* Coming Up: U.S. weekly jobless claims; 1230 GMT (Updates prices)
By Manash Goswami
SINGAPORE, May 16 (Reuters) - Brent futures slipped towards $103 a barrel on Thursday as a sharper-than-expected drop in U.S. factory output muddied the outlook for demand, but a surprise drawdown in crude stockpiles in the world's top consumer helped stem the slide.
U.S. factory output dropped in April and manufacturing activity in New York state contracted this month as a recession in the euro zone and slower growth in China undercut demand for exports from the world's biggest economy.
The uncertain global outlook at a time when supplies are rising weighed on oil, making it difficult for prices to move much higher from current levels.
Brent slipped 32 cents to $103.36 a barrel by 0651 GMT, after settling up $1.08 -- the biggest rise in dollar terms since May. 6. U.S. oil fell 53 cents to $93.77, after ending 9 cents higher.
"The economy doesn't support prices at these levels so why should they be there?" said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm. "The rise in oil we saw yesterday was because of the surprise draw in U.S. crude stockpiles. It caught some people short."
STOCKPILES
U.S. crude stockpiles declined by 624,000 barrels during the week to May 10, according to data from the Energy Information Administration (EIA). Analysts had forecast on average a 300,000-barrel crude build.
Commercial crude stockpiles hit 395.5 million barrels in the week to May 3, the highest since records began in 1982.
Yet, investors are not taking the drawdown as an indicator of a change in trend because gasoline and distillate inventories jumped well above expectations.
Gasoline stockpiles on the East Coast rose by 1.8 million barrels as the nation heads into the summer gasoline season, up nearly 10 million barrels from the same time last year.
"For the first time in six weeks, gasoline stocks built, unexpectedly halting the seasonal stock decline," analyst at BNP Paribas said in a note.
"Stocks are now near the top of the narrow five-year range for this time of year, having previously been trending downwards at usual seasonal rates and at levels marginally above normal."
Oil prices drew some support from news that the United Nations' nuclear agency failed to persuade Iran to let it resume an investigation into suspected atomic bomb research, reviving worries about supply disruption.
Fears of geopolitical tensions worsening in the Middle East have kept Brent above $100 a barrel for most of 2012 and this year despite a gloomy demand outlook. But without a further escalation in the crisis, oil is unlikely to get a boost as the risk factor has been priced in.
"The rhetoric comes and goes," said Barratt. "The stance everyone makes is soft as nobody wants to rattle the cage." (Editing by Himani Sarkar and Richard Pullin)
