NYMEX-Crude drops below $60 on economic jitters

* Wall Street losses ground, dollar down

* U.S. jobless claims lowest since Jan 10-gov't

NEW YORK, July 9 (Reuters) - U.S. crude oil futures reversed course and
fell below $60 a barrel Thursday morning as early euphoria over a drop in
jobless benefit claims faded and oil markets tracked Wall Street, where
investors remained on edge as the second quarter earnings season got under
way.

Analysts suggested the overnight and early rebound after six days of
losses was technical, spurred by an oversold condition.

"While the price plunge may have been a bit overcooked short term, we
are still viewing a resumption of the downtrend to the $56-58 area as a
high probability prior to the August WTI contract expiry (on July 21)."
said Jim Ritterbusch, president of Ritterbusch & Associates in Galena,
Illinois.

Earlier, crude futures rose above $61 a barrel, supported by a drop in
U.S. weekly jobless benefit claims and reassuring early signs of second
quarter corporate results.

But soon after Wall Street opened, equities cut initial gains, with
uncertainties about second-quarter corporate results dominating investor
concerns. [.N]

Analysts also raised continuing concerns over weak oil demand amid
brimming product inventories and uncertainties about an economic recovery.

Some analysts said oil markets were also keeping a wary eye over policy
initiatives being propounded by the Commodity Futures Trading Commission,
the U.S. regulator of futures markets.

The Intercontinenal Exchange (ICE.N), the Atlanta-based exchange
operator, said Thursday it welcomes the chance to present its views in
hearings being scheduled by the CFTC on its proposals. [ID:nN09443645]

NYMEX August crude futures settled at the lowest level in seven weeks
on Wednesday, hammered by large increases in distillate inventories, which
hit their highest level in 25 years, and gasoline stocks last week.
[EIA/S]

Demand worries were also raised by the Organization of the Petroleum
Exporting Countries (OPEC) which said on Wednesday that consumption of its
crude would not return to 31 million barrels per day -- the level it
averaged in 2008 before the economic crisis dampened oil use -- until 2013.
[ID:nWLA8490]

PRICES

* On the New York Mercantile Exchange at 11:20 a.m. EDT (1520 GMT),
August crude CLQ9 was down 58 cents, or 0.96 percent, at $59.56 a barrel,
trading from $59.25 to $61.62.

*The day's low was the cheapest since May 19, when front-month crude
futures hit $58.55.

* NYMEX August crude settled at $60.14 on Wednesday, the lowest close
since May 19's $59.65.

* The June 30 peak of $73.38 was the highest intraday front-month crude
oil price since crude hit $75.69 on Oct. 21.

* In London, August Brent crude LCOQ9 was down 29 cents at $60.14 a
barrel, trading from $59.76 to $62.17. It settled at $60.43 on Wednesday,
the lowest close since May 25's $60.21.

* NYMEX August RBOB RBQ9 was down 0.12 cent, or 0.07 percent, at
$1.5190 a gallon, trading from $1.6241 to $1.6791. It settled on Wednesday
at $1.6333, the lowest close since May 6's $1.6280.

* NYMEX August heating oil HOQ9 was down 1.89 cents, or 1.23 percent,
at $1.5190 a gallon, trading from $1.5548 to $1.5689. It settled at $1.5379
on Wednesday, the lowest since May 21's $1.5294.

* The August/August RBOB crack spread <0#RB-CL=R> was at $8.99, after
ending at $8.46 on Wednesday. The August/August heating oil crack spread
<0#CL-HO=R> was at $4.24, after ending at $4.45 on Wednesday.

* The spread between the current front month and the
five-year forward crude contract CLc61 was at $18.44 based on Wednesday's
settlement of the August 2014 contract at $78. The spread on Wednesday
ended at $17.86.

MARKET NEWS

* Initial claims for state unemployment insurance fell 52,000 to a much
lower-than-expected seasonally adjusted 565,000 in the week ended July 4
from 617,000 the prior week, the Labor Department said. It was the lowest
reading since January. For details, see [ID:nN08382700]

* The yen and the U.S. dollar fell on Thursday, giving back some gains
from the previous session as U.S. stock futures rose, while sterling moved
higher after the Bank of England kept its quantitative easing target
unchanged. [USD/]
(Reporting by Gene Ramos and Joshua Scheneyer;
Editing by John Picinich)