Oil steadies at $60, economic and demand worries linger

                                
 * Oil steadies at $60 after 11 percent drop last week
                                
 * U.S. consumer sentiment down in July
                                
 * BNP Paribas says sees more correction for oil prices
                                
 By Fayen Wong
                                
 PERTH, July 13 (Reuters) - Oil prices steadied at just
above $60 a barrel on Monday, pausing from last week's losses,
amid growing concerns about the pace of a global economic
recovery and its impact on world energy demand.
                                
 Oil prices dropped 11 percent last week in their biggest
weekly decline since late January amid mounting worries that a
economic rebound may not be coming soon to help spur flagging
fuel demand.
                                
 Crude oil for August delivery <CLc1> edged up 12 cents to
$60.01 by 0024 GMT, hovering near a six-week low. The contract
settled down 52 cents at $59.89 on Friday.
                                
 London Brent crude <LCOc1> gained 28 cents to $60.80.
                                
 "The market has been too optimistic about a global economic
recovery later this year, but that now looks unlikely to
happen, so oil prices are languishing," said David Moore, a
commodities analyst at the Commonwealth Bank of Australia,
adding that crude stocks were still at high levels in the
United States.
                                
 Oil's decline on Friday was encouraged by a report that
U.S. consumer sentiment wilted in early July to its weakest
since March, according to data by the Reuters/University of
Michigan Surveys of Consumers, adding to the recession worries
that also dragged U.S. stocks lower. [ID:nN10511831]
                                
 Analysts said oil prices would continue to track the
equities markets in the short term. And with Wall Street's
rally stalled, this week could be crunch time as big banks'
earnings, including Citigroup's <C.N>, roll in and investors
scrutinize reams of economic data for clues on the recovery.
[nN12536585]
                                
 Moore said a raft of key economic data from China,
including gross domestic production in the second quarter,
industrial output and retail sales, due to be released on
Thursday, will also be keenly watched by investors.
                                
 Analysts at BNP Baribas said oil prices could see more
corrections in the short term as external factors which have
helped oil's recent rally, including a weak U.S. dollar and
rising equities, are set to reverse course.
                                
 "Focus will shift back to oil fundamentals which remain
weak -- oil demand will contract with the world economy, and
OPEC has a large inventory hurdle to overcome," BNP's Harry
Tchilinguirian said in a report.
                                
 Investors have also been made cautious by U.S. government
moves to reign in speculation in energy and metals markets,
while the Commodity Futures Trading Commission could have new
regulations in place by late October.
[ID:nL8366016][nN10514382]
                                
 Separately, an oil tank blew up at a chemical plant in
Urumqi, capital of northwest China's restive Xinjiang region,
on Sunday, but local police and refinery officials ruled out a
deliberate attack. [ID:nPEK336607]
                                
 In Nigeria, a top rebel leader is expected to be freed
early this week, his lawyer said on Sunday, but analysts doubt
his release will lead to a significant drop in militant attacks
in Africa's biggest oil sector. [ID:nLC334128]
                                
 Crude oil speculators on the New York Mercantile Exchange
cut their net long positions in the week to July 7 as prices
fell, data from the Commodity Futures Trading Commission
released on Friday showed. [nN10529329]
 (Reporting by Fayen Wong; Editing by Clarence Fernandez)