* IEA monthly oil report predicts higher demand next year
* U.S. regulation adds to bearish mood
(Updates prices, adds quote, adds detail)
By Emma Farge
LONDON, July 10 (Reuters) - U.S. crude prices sank a dollar
to below $60 a barrel on Friday, their lowest since mid-May and
were 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 trading
$1.13 a barrel lower at $59.28 a barrel by 1154 GMT, its lowest
since $58.55 on May 19.
London Brent crude <LCOc1> was down 96 cents at $60.14 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 around
$10 as expectations of a swift economic recovery faltered.
Although the IEA predicted world oil use would grow in 2010,
it added that depended on expected economic recovery
materialising.
Prices briefly edged higher immediately after the agency's
report, but then resumed their slide.
"While 2010 oil demand and economic activity figures are
expected to show better-than-expected growth, the world is still
in for recession in 2009 and that is hard to reconcile with a
high oil price tag," said Harry Tchilinguirian of BNP Paribas.
"The oil market is beginning to focus again on its weak
fundamentals."
Oil has fallen in six of the previous seven sessions. So far
this week, prices have dropped 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 militants in Nigeria. 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.
But some analysts thought news that Nigerian President Umaru
Yar'Adua could be freed in the next few days after the revel
leader welcomed the government's amnesty offer could lead to
less frequent supply disruptions. []
(Additional reporting by Maryelle Demongeot in Singapore;
Editing by Keiron Henderson)
