Oil falls below $67 on slow demand; eyes GDP

Oil slipped below $67 on Friday as investors turned their attention back to weak fundamentals after the previous day's sharp equities-led gains.

Oil analysts said the dip in prices also reflected caution ahead of key U.S. economic data due out later in the day.

U.S. light crude <CLc1 fell 21 cents to $66.73 a barrel by 0946 GMT. London Brent crude dropped by 39 cents to $69.72.

On Thursday, oil jumped more than 5 percent, to register its biggest one-day gain since early April, as U.S. data showed the number of workers staying on jobless rolls fell to the lowest in three months last week.

The jobs data eclipsed figures on Wednesday that showed a large increase in U.S. crude oil inventories and slow domestic oil demand.

"Yesterday's U.S. employment data cannot really justify the gain (in oil prices) when Wednesday's data showed a large increase in crude oil inventories," Andy Sommer, oil analyst with EGL in Switzerland, said.

"Also many people may take a wait-and-see stance ahead of the U.S. GDP data. Expectation is another contraction of the U.S. economy."

The U.S. government's advance report on second quarter gross domestic product will be released at 1230 GMT. A Reuters poll gave a median forecast of a 1.5 percent contraction.

MONTHLY FALL

Oil's fall came although the MSCI world equity index rallied to fresh 9-1/2 month peaks, with Asian shares scoring a double digit gain in July..

Oil prices are poised to mark their first monthly fall since January, which is likely to be about 4 percent, as its fundamentals remain weak in many areas of the world.

In the United States, the world's largest consumer, crude inventories have been on the rise and oil refinery utilisation rates have remained lower than normal. Europe's oil demand has fallen more sharply than most other areas in the world this year.

U.S. crude oil imports in May fell to the lowest level for the month in 12 years. In Japan, the world's third largest oil consumer, fuel sales fell in June, dropping for the 13th consecutive month.