UPDATE 5-Oil falls below $71 after inventory data

                                
 * Crude stocks rise, distillates fall - EIA
                                
 * Weak US economic data pressures equities, oil
                                
 
                                
 (Updates throughout after EIA data)
                                
 By Joe Brock
                                
 LONDON, Aug 5 (Reuters) - Oil fell towards $70 a barrel on
Wednesday after U.S. government inventory data showed a build in
crude stocks and weak economic data raised doubts about oil
demand recovery in the world's largest energy consumer.
                                
 U.S. light, sweet crude <CLc1> fell 81 cents to $70.61 a
barrel by 1455 GMT, giving away some of the gains that helped
oil rise 13 percent since late last week.
                                
 London Brent crude <LCOc1> fell 21 cents to $74.07 a barrel.
                                
 U.S. crude inventories rose more than expected last week as
refinery runs eased, while distillate stocks showed a surprise
draw, according to weekly data from the U.S. Energy Information
Administration (EIA) released on Wednesday.
                                
 Crude stockpiles in the world's top consumer rose by 1.7
million barrels in the week to July 31, against forecasts for an
800,000-barrel build as refinery utilization fell by 0.1
percentage point to 84.5 percent. [ID:nN05244631] 
                                
 "The big build on crude caught some people by surprise and
shows overall weakness in the economy and the unwinding of
economic optimism. Nothing in the numbers was very bullish,"
said Phil Flynn, analyst at PFGBest Research in Chicago.
                                
 The EIA data followed inventory numbers on Tuesday from the
American Petroleum Institute, which showed crude stocks fell 1.5
million barrels last week but gasoline stocks rose by a further
2.1 million barrels. [API/S]
                                
 Oil was already lower before the release of inventory
figures as doubts over economic recovery and demand for fuel
resurfaced after weak U.S. services sector data depressed stock
markets both sides of the Atlantic. [ID:nN05242401]
                                
 Expectations that a turnaround in the global economy could
lift sagging oil demand has helped send crude up from lows below
$33 a barrel in December, with energy traders keeping an eye on
equities markets for signs of an economic rebound.
                                
 Investors were awaiting news from a meeting between trade
representatives and Britain's financial powers, the UK Financial
Services Authority (FSA) and the UK Treasury, which comes before
a third Commodity Futures Trading Commission (CFTC) hearing in
Washington over how to rein in speculation. [ID:nL5366815]
                                
 The UK meeting will discuss market transparency and
efficiency, according to the FSA invitation to oil market
participants, a copy of which has been seen by Reuters.
                                
 Energy traders also were watching an area of thunderstorms
in the Atlantic Ocean several hundred miles southwest of the
Cape Verde Islands associated with a tropical wave. The U.S.
National Hurricane Center said it had less than a 30 percent
chance of becoming a tropical storm. [ID:nN0475086]
 (Editing by Sue Thomas)