Oil falls to near two-month low on economy worries

By Richard Valdmanis

NEW YORK (Reuters) - 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 38 cents to $59.51 a barrel by 1745 GMT (6:45 p.m. British time), after earlier falling to a low of $58.32, the lowest since May 18. London Brent rose 8 cents to $60.60 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 towards $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.