Oil rose above $70 a barrel on Tuesday in choppy trade, as the market awaited U.S. data expected to indicate economic recovery and higher fuel consumption in the world's biggest energy market.

By 1235 GMT (8:35 a.m. EDT), U.S. crude for October delivery was up 12 cents at $70.08 a barrel. London Brent crude was up 25 cents at $69.90.

Oil has risen from a low of 32.40 in December, helped by economic recovery optimism that lifted global stocks to 10-month highs last month.

The purchasing managers' index in China, the world's second-biggest oil user, reached a 16-month high in August..

The data helped crude rise to an intra-day high of $70.64, as the market recovered from a 4 percent fall on Monday in response to worries about Chinese curbs to lending.

The Chinese industry data supplied a bit of hope. (But) I don't see a strong recovery in the oil price, said Eugen Weinberg, analyst at Commerzbank.

The risk factors ... freight rates, a weak stock market, possibly also a stronger dollar and weak equity markets in Europe today indicate prices are likely to fall.

U.S. DATA

Oil traders will look for fresh direction in August manufacturing data and weekly crude stockpiles data from the United States.

The Institute for Supply Management's manufacturing gauge will be released at 1400 GMT and is expected to be in positive territory for the first time since the recession began, a Reuters poll of economists showed.

At 2030 GMT (4:30 p.m. EDT), weekly oil inventory data from the American Petroleum Institute (API) is expected to show a 400,000 barrel fall in U.S. crude stocks following an increase in refinery utilization, a preliminary Reuters poll of analysts showed.

The industry data will be followed on Wednesday by figures from the U.S. government's Energy Information Administration (EIA).

Adding to already high inventories, OPEC has reduced its compliance with agreed production curbs, a Reuters survey on Tuesday found.

OPEC supply in August rose for a fourth consecutive month as Saudi Arabia, Nigeria and Venezuela increased their production, taking overall output discipline to 68 percent from a revised 70 percent in July.

The Organization of the Petroleum Exporting Countries meets on September 9 in Vienna to reconsider its output policy.

(Additional reporting by Jennifer Tan in Singapore; editing by Sue Thomas)

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