Oil prices slipped on Monday, briefly touching their lowest level in almost two months on concerns over the state of the global economy.
U.S. crude oil for August delivery fell 20 cents to settle at $59.69 a barrel, after earlier falling to a low of $58.32, the lowest since May 18. London Brent rose 17 cents to $60.69 a barrel.
The losses add to last week's 11 percent slide -- the market's biggest weekly decline since late January -- triggered by concerns another economic dip could delay a rebound in demand for fuel.
Prices are falling today and will probably fall tomorrow and for the rest of the week because in the near term the economic fundamentals continue to be very weak, said Mike Wittner, global head of oil research at Societe Generale.
Wittner saw a target for U.S. light crude at around $55 per barrel and said prices could press on down toward $50.
Adding downward pressure to oil prices, U.S. regulators have said they are planning to move aggressively to rein in excessive speculation in energy and commodity markets.
The market has realigned to be more in line with fundamentals as hopes for a quick recovery fade, and regulators keep talking about greater transparency, which market participants translate as position limits, said Mike Fitzpatrick, analyst at MF Global in New York.
Oil losses reverse a 40 percent spike last quarter as investors shrugged off weak fundamentals and banked on swift global economic recovery.
Daniel Liu, strategist at MF Global in Singapore, said that rally was clearly overdone.
We believe oil prices will see a further correction to fall to around $55, before they bounce up when confidence on the global economy returns to the market, Liu said.
Oil's losses Monday came despite a rise on Wall Street after positive analyst comments on the banking sector. <.N>
Oil prices had been tracking strong moves in the equities markets for months as dealers took stock market moves as an indication of the economic outlook.
Tempering oil's losses, Nigeria's main rebel group said Monday it sabotaged a loading dock for oil tankers in Lagos state, the first in the area since the group began its latest campaign of violence against Africa's biggest oil producer.
The attack came as the government released Henry Okah, the suspected leader of the Movement for the Emancipation of the Niger Delta, after more than a year in detention for suspected arms dealing.
(Additional reporting by Christopher Johnson in London and Fayen Wong in Perth; Editing by Christian Wiessner)