Oil dips on demand worries

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LONDON (Reuters) -- U.S. oil prices dipped into negative territory Tuesday as dealers worried a slow and bumpy economic recovery could delay a rebound in ailing world energy demand.

U.S. crude fell 17 cents to settle at $59.52 a barrel Monday, extending a decline that shaved 11% from the price last week.

The losses came after U.S. data showed disappointing U.S. consumer spending in June alongside a larger-than-expected increase in producer prices -- a reflection of inflation.

Adding gloom to the economic outlook, developed countries are expected to lose nearly 30 million jobs from the end of 2007 to the end of 2010, the Organization for Economic Cooperation and Development said.

In a sign of soft demand in leading energy user the United States, Mastercard SpendingPulse said Tuesday that gasoline consumption over the peak travel July 4 holiday was 4.3% lower than a year ago.

The Organization of the Petroleum Exporting Countries, meanwhile, said world demand for its oil would fall by 380,000 barrels per day to 28.11 million in 2010 compared with this year.

For the nearer term, the market will look to U.S. inventory data for release by the American Petroleum Institute Tuesday and the U.S. Energy Information Administration Wednesday.

Analysts polled by Reuters predicted crude stocks would have fallen for a sixth straight week, but distillate inventories -- which include diesel and are already at a nearly 25-year high -- were expected to rise again.

Gasoline stocks were also expected to rise.

Some analysts identified the widening offensive by Nigeria's main militant group against Africa's largest oil producer as a bullish factor that could limit supplies.

The Movement for the Emancipation of the Niger Delta (MEND) sabotaged an oil dock in Lagos state, killing five people in the group's first attack outside the Niger Delta since it began its latest campaign.