* Oil dips below $60 in early trade
* IEA monthly oil report predicts higher demand next year
* U.S. regulation adds to bearish mood
(Refiles to change tag to UPDATE 2)
By Emma Farge
LONDON, July 10 (Reuters) - Oil prices sank below $60 a
barrel on Friday, poised for their biggest weekly fall since
January, as traders focused on economic uncertainty.
The latest report from the International Energy Agency
predicted an increase in oil consumption in 2010, but expected
it to stay negative in 2009 and saw limited demand for OPEC
crude. []
U.S. light crude for August delivery <CLc1> was down 82
cents at $59.59 by 1008 GMT.
London Brent crude <LC0c1> was down 78 cents at $60.32 a
barrel.
Oil rose to more than $73 at the end of June, its highest
level this year, but since then the market has dropped more than
$10 as expectations of a swift economic recovery faded.
Although the IEA predicted world oil use would grow in 2010,
it added that depended on expected economy recovery
materialising.
Prices briefly edged higher immediately after the agency's
report, but then resumed their slide.
"It is not a report that is going to add to the downside. It
is slightly positive and won't add to the weak trend of recent
days," said Olivier Jakob of Petromatrix.
Oil has fallen in six of the previous seven sessions. So far
this week, prices have fallen nearly 10 percent, slightly less
than an 11 percent weekly drop in January.
The latest wave of selling began after much worse than
expected U.S. unemployment data on Thursday [] and
has been sustained by a steady stream of negative economic news.
An announcement this week from U.S. regulator the CFTC that
it was considering tighter controls on excessive speculation in
the commodity markets added to the bearish mood, although
analysts said it would take months to implement changes.
[]
"A strong incentive was created for market participants of
all types to draw back from the market, particularly from the
long side of U.S. markets," Barclays Capital said in its weekly
oil review.
One supportive factor for the oil market has been disruption
of supplies by Nigerian militants. That has helped tighten OPEC
supplies, although the group's discipline has declined to
roughly 70 percent from an estimated peak of 80 percent of
promised supply curbs earlier this year.
Nigerian President Umaru Yar'Adua wants Henry Okah, on trial
for gun-running and treason, to be freed in the next few days
after the rebel leader welcomed the government's amnesty offer,
a spokesman said on Friday. []
(Additional reporting by Maryelle Demongeot in Singapore;
Editing by Keiron Henderson)
