UPDATE 3-Oil falls below $67 on slow demand; eyes GDP

                                
 * Investors refocus on weak oil fundamentals
                                
 * Caution over U.S. GDP data
                                
 * Oil headed for first monthly fall since January
                                
 
                                
 (Recasts throughout)
                                
 By Ikuko Kurahone
                                
 LONDON, July 31 (Reuters) - 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 <LCOc1> 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. [EIA/S]
                                
 "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. [ECI/US]
                                
 
                                
 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. [.MIWD00000PUS] [ID:nHKG116058].
                                
 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.
 (Reporting by Maryelle Demongeot in Singapore and Ikuko
Kurahone in London)