* IEA: Global oil demand to bounce back in 2010

* Wall Street falls on Chevron warning, consumer data

* Dollar, yen rise as investors turn cautious

* U.S. May trade gap narrows to lowest since 1999

NEW YORK, July 9 (Reuters) - U.S. crude oil futures pared losses Friday afternoon on pre-weekend short-covering, but analysts said the market remained beset with economic worries.

Prices fell below $60 in early trading, pressured by a weak demand forecast from the International Energy Agency, weakening equities markets and a stronger dollar.

Global oil demand will rebound 1.7 percent next year, but the demand outlook for this year was "effectively unchanged," -- down 2.9 percent, or 2.5 million bpd from last year, the Paris-based International Energy Agency, adviser to 28 industrialized nations, said in its monthly forecast. [IEA/M]

"The gloomy mood in the oil markets continues and it looks like participants are in the 'hunker-down' mode here. The economic data out today do not suggest that the economy is faring any better. And consumer confidence is poor," said Phil Flynn, analyst at PFGBest Research in Chicago.

"The oil markets are moving with the stock markets and we are seeing some short-covering before the weekend, so the losses have been pared as the stock market is also off its lows," he added.