* China July Flash HSBC PMI falls to 11-month low

* US gasoline, distillate stocks drop vs forecast gains -API

* Bomb at Egypt police station kills one, injures 17

* Coming Up: U.S. EIA weekly crude stocks; 1430 GMT

By Manash Goswami

SINGAPORE, July 24 (Reuters) - Brent futures slipped towards $108 on Monday as weak China data renewed concerns over demand growth from the world's second-biggest oil consumer, but continued falls in refined product and crude stocks in the United States helped stem losses.

Activity in China's vast manufacturing sector slowed to an 11-month low in July as new orders faltered, suggesting the economy is still losing momentum. Yet, if U.S. government data validates an industry report that showed surprise drops in U.S. product stocks, particularly gasoline, oil may recoup losses.

Brent crude LCOc1 slipped 25 cents to $108.17 a barrel by 0317 GMT, after settling 27 cents up on Tuesday. U.S. oil CLc1 fell 30 cents to $106.93, after ending 29 cents higher.

"The weak China data is likely to weigh on prices," said Lee Chen Hoay, an investment analyst with Phillip Futures. "But a major factor that will support prices is the drawdown in U.S. stocks. Assuming the EIA numbers are in the same direction, crude prices will remain supported."

The U.S. Department of Energy's Energy Information Administration (EIA) inventory data is due later in the day.

The surprise falls in oil product stockpiles in the United States, based on data from industry group the American Petroleum Institute on Tuesday, revived hopes of a rise in demand growth in the world's biggest oil consumer.

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Both U.S. gasoline and distillate fuels stockpiles, which include diesel and heating oil, fell several hundred thousand barrels versus expectations in a Reuters poll of gains of more than a million barrels, the API data showed.

The surprises overshadowed a smaller-than-expected fall in crude stocks, indicating healthy U.S. oil demand. API/S

Oil prices also continue to be supported by unrest and tension in the Middle East, with a bomb killing one and wounding 17 in Cairo early on Wednesday. ID:nL6N0FT3OS

The next psychological barrier for both Brent and the U.S. benchmark is $110 a barrel because the difference between the two contracts have narrowed sharply, said Lee.

Brent's premium to U.S. oil futures CL-LCO1=R , which narrowed sharply last week and briefly inverted on Friday, remained thin at about $1.23 a barrel on Wednesday.

CHINA

The flash HSBC/Markit Purchasing Managers' Index fell to 47.7 this month from June's final reading of 48.2, marking a third straight month below the watershed 50 line which demarcates expansion of activities from contraction.

This is the weakest level since August 2012.

A sub-index measuring employment slid to 47.3 in July, the weakest since March 2009. It stood at 47.6 in June and has been below 50 for four months in a row. ID:nB9N0FP00F

Brent is biased to drop to $106.86 as indicated by its wave pattern and a Fibonacci retracement analysis, according to Reuters technical analyst Wang Tao. TECH/C

(Editing by Tom Hogue)

((Manash.Goswami@thomsonreuters.com)(+65-68703887)(Reuters Messaging: manash.goswami.thomsonreuters.com@reuters.net))

Keywords: MARKETS OIL/