* European shares fall 0.8 percent; world stocks ease 0.3 percent
* Oil prices rise towards above $71 a barrel
* Dollar slips on BRIC support of diversified monetary system
By Sujata Rao
LONDON, June 17 (Reuters) - European shares slid for the fourth day on Wednesday, echoing falls across most of Asia as some investors unwound trades betting on a speedy economic recovery, while dollar weakness boosted oil towards $71 a barrel.
Mining stocks led the losses in Europe but doubts about the heralded global economic recovery are weighing on sentiment worldwide after several U.S. economic indicators this week came in below expectations, raising fears that investors may have pushed up equity and commodity prices too quickly.
Stock corrections have been relatively tame so far but they have taken world stocks as well as emerging equities down to three-week lows. Both indexes have risen about 40 percent and 70 percent respectively off their March troughs as investors bet on a speedy economic recovery.
A positive investor sentiment reading on Tuesday in Europe's biggest economy, Germany, was overshadowed by poor economic data in the United States and disappointing sales by top U.S. retailer Best Buy which spurred worries about an anaemic recovery and pushed Wall Street down over one percent.
"We seem to be stuck in a negative mode now, and we're well down on levels seen last week," said Peter Dixon, economist at Commerzbank. "Some of the hype on the recovery seems to have faded and we seem to be returning to realism."
By 0830 GMT, the pan-European FTSEurofirst 300 was down 0.8 percent, with miners such as Anglo American and Rio Tinto leading the losses. Spanish utility Iberdola and British grocer J.Sainsbury, both of which announced share issue plans, also fell.
The Reuters-Jefferies CRB index, a basket of 19 commodity futures, eased further, having slipped about 4 percent from a seven-month high reached last Thursday.
It is still up 15 percent since the end of April.
Wall Street's VIX volatility index -- a measure of risk -- has risen to a three-week high above 30.
Oil gained on Wednesday as dealers remain convinced that crude will not fall much below $70 if the dollar continues to weaken. Also, data expected at 1430 GMT is expected to show a large fall in crude stocks in the United States.
"A further fall in crude stocks is helping the more bullish picture for oil. I think the draws in crude stocks is more important (than U.S. dollar weakness)," Bache Commodities broker Christopher Bellew said.
Oil has however eased from last week's high above $73 per barrel as investors question whether the world economy is recovering at a fast enough pace to justify the doubling in oil prices since February.
DOLLAR
The dollar continues on the back foot after leaders of the emerging BRICs nations -- Brazil, Russia, India and China -- at a summit on Tuesday underlined the need for a more diversified monetary system.
The summit communique made no mention of support for a smaller role for the dollar, giving some relief to the greenback on Tuesday but the status of the dollar's role as the main reserve currency remains in focus.
"The BRICs were asking for a more diverse monetary system; that would explain some of the dollar weakness," Martin McMahon, currency strategist at Credit Suisse in Zurich said.
The dollar index fell for the second consecutive day though losses were limited by a slide in European shares, which tempered demand for risk. By 0756 GMT, the euro was up 0.5 percent at $1.3912, after rising as high as around $1.3925.
The dollar index was down 0.2 percent, while the U.S. currency was little changed against the yen at 96.40 yen.
Markets are awaiting May consumer prices data in the United States and are bracing for next week's Federal Reserve meeting.
U.S. stock futures slid 1.2 percent, heralding a weak opening in New York.
Bond investors were starting to retreat to the sidelines ahead of the Fed meeting, taking profits off a four-day rise in U.S. Treasury prices. The recent risk reversal had caused yields on benchmark 10-year Treasuries -- now at 3.68 percent -- to rise as far as 4 percent last week.
The benchmark 10-year U.S. Treasury was down 8/32 in price to yield 3.6802 while the two-year note ticked down 1/32 to 1.1996 percent. (Additional reporting by Simon Falush in London, Kevin Plumberg in Tokyo; Editing by Andy Bruce)