Oil under $60; biggest weekly fall since Jan in view

By Emma Farge

LONDON (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 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 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.