UPDATE 11-Oil falls 4 pct on economic recovery concerns

* Nigerian rebels attack oil facility, hijack tanker

* U.S. service sector shrinks less in June (Updates prices throughout)

NEW YORK, July 6 (Reuters) - Oil settled 4 percent lower on Monday as doubts over a potential rebound in the global economy spurred investor risk aversion.

U.S. crude CLc1 settled at $64.05 a barrel, down $2.68 or 4.02 percent from Thursday's close, after touching a five-week low of $63.40. U.S. markets were closed on Friday for the Independence Day holiday weekend.

London Brent crude LCOc1 fell $1.56 from Friday's close to settle at $64.05 a barrel.

Optimism that an economic recovery could bolster demand has helped lift crude off December lows below $33 a barrel. Recent weak economic data -- including a poor U.S. jobs report last week -- has weighed on markets, however.

U.S. stock markets [.N] dipped early, despite data showing the U.S. service sector contracted at a decelerating pace last month and posted the highest activity level since September 2008. [ID:nN06223023]

"A lot of people are nervous about the economy, and now everybody wants to get out of the exits at the same time," said Phil Flynn, PFGBest Research, Chicago.

"We are seeing this in the stock markets, the gold market and markets for other commodities, including oil. We did get a little bit of support in the latest ISM (service sector) numbers, but all in all, I feel that demand will be on a downward trend in the next couple of months," Flynn added.