UPDATE 11-Oil prices fall after U.S. crude build

* Weekly U.S. crude stocks rose by 3.42 mln bbls-EIA

* Gasoline stockpiles fell for the 11th straight week

* U.S. private payrolls disappoint
(Updates prices, adds detail, quote)

By Emma Farge

NEW YORK, May 4 (Reuters) - Oil prices fell to their lowest
in two weeks on Wednesday, hit by a build in U.S. crude stocks
and a broad decline in commodities after weak U.S. economic
data and concerns over tighter Chinese monetary policy.

Weekly crude stocks rose by 3.4 million barrels even as
imports fell, the U.S. Department of Energy said. Stockpiles
were up last week by more than the 2 million barrels that
analysts had expected. [EIA/S]

The higher crude stocks "emboldened traders to sell here.
At this point, however, the market is overdue for a pullback
after having hit multi-year highs recently," said Gene
McGillian of Tradition Energy in Connecticut.

Brent crude for June LCOc1 fell $1.26 a barrel to settle
at $121.19 after dipping to a two-week low of $120.49 earlier
in the day.

U.S. crude CLc1 fell for the third consecutive day to
settle down $1.81 at $109.24 a barrel. The contract has fallen
nearly 5 percent since Monday, when it rose to as much as
$114.83 a barrel -- the highest since September 2008.

Commodities and equities fell broadly after weak economic
data in the world's top economy, with a sharp slowdown in the
vast services sector and less hiring by private companies in
April. [ID:nN04209762] The CRB commodities index lost 1.7
percent .CRB on Wednesday.

A U.S. labor market report on Friday is also expected to
show payroll growth eased last month.

Oil prices failed to get a lift from Department of Energy
data showing U.S. gasoline stocks fell for an 11th straight
time last week, to their lowest since June 2009, although
benchmark U.S. gasoline futures fell by a more modest 0.1
percent on Wednesday. RBM1

"There's a bit of a shift out of risky assets like oil. It
doesn't mean it has turned bearish, but the run can't keep
going in one direction," said Tom Bentz, broker at BNP Paribas
Commodity Futures in New York.

Oil has traded in a tight inverse correlation with the
dollar this week, but the relationship broke down on Wednesday
as both the dollar and oil slipped. The greenback fell to a
fresh three-year low versus a basket of currencies .DXY and
the euro briefly rose above $1.49. [USD/]

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Stories on Middle East unrest:

[ID:nTOPMEAST]

Commodities vs dollar

r.reuters.com/wex39r

For People's Bank of China quarterly monetary policy

report:

[ID:nB9E7F1034]

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CHINA FACTOR, FEAR PREMIUM

China is expected to tighten monetary policy further to
curb inflation, a move that could dampen demand in the world's
biggest energy consumer.

In Hanoi, China's Vice Finance Minister Li Yong said the
government would continue to use measures such as higher
interest rates and bank deposit requirements to curb inflation.
[ID:nL3E7G421O]

The impact on oil prices is likely to be muted, however,
given the strength of Chinese demand, analysts said.

"We have already seen some moderation in economic activity
in China, but the oil market has not seen any obvious slowdown
despite previous tightening," said Barclays Capital commodities
analyst Yingxi Yu.

Analysts also said a fear premium on oil prices would
remain in place due to ongoing tensions in oil-producing
regions of North Africa and the Middle East and the recent
death of al Qaeda leader Osama bin Laden.

In Libya, there was no let-up in the conflict as fighting
between rebels and forces loyal to Muammar Gaddafi forced
thousands of refugees to flee on foot to the Tunisian border
and by boat to Europe, the United Nations said on Tuesday.
[ID:nLDE7411YX]
(Additional reporting by Joshua Schneyer in New York, Francis
Kan in Singapore, Zaida Espana in London; Editing by Dale
Hudson)