Oil settles below $60 a barrel on demand worries

NEW YORK -- Oil prices stayed below $60 a barrel Monday with concerns the global economy isn't improving quickly and demand will remain soft.

Benchmark crude for August delivery fell 20 cents to settle at $59.69 a barrel on the New York Mercantile Exchange. Prices dipped as low as $59.30 earlier in the session.

Oil prices have fallen about $14 a barrel, or 19%, since June 30 after poor employment data from the U.S. and Europe raised doubts that the global economy was poised for a strong recovery this year.

The first batch of second-quarter corporate results are due out this week. Data on housing starts, retail sales and industrial production will also show if the economy is beginning to bounce back or has further to go.

"Expectations are that most companies are going to report poor results and a conservative outlook," said Victor Shum, an energy analyst with Purvin & Gertz. "It's not unreasonable to expect crude prices to move down to the mid-$50s over the coming days and weeks."

Gasoline sales in the U.S. over the Independence Day holiday weekend, a time that usually marks the peak of gasoline demand for the summer, were unusually weak.

The drop in oil prices Monday came despite a decline in the dollar and an attack on an oil facility in Nigeria.

Oil is often seen as a hedge against inflation, and the dollar tends to trade inversely with it. On Monday the dollar was down against the euro and the yen.

In Nigeria, Africa's largest crude exporter, militants said they had attacked an oil depot and loading tankers in Lagos.

Attacks over the past years have cut Nigeria's oil output about 25%.

With oil prices sliding despite a weaker dollar and attacks on supply point, the recent trend toward higher prices may be over, said analyst Stephen Schork.

"Some more air needs to be let out of the bubble," he said.

In other Nymex trading, gasoline for August delivery fell 1.1 cent to settle at $1.6394 a gallon and heating oil dropped about 3 cents to settle at $1.5038. Natural gas for August delivery slid 11 cents to settle at $3.263 per 1,000 cubic feet, though it hit a 52-week low of $3.225 earlier in the session.