Filed Under: Oil & Gas - Upstream activities, Economy and Business and Finance, Markets & Exchanges, Energy & Resources, Energy SINGAPORE--Oil was trading at about $56 a barrel in Asia on Monday amid a deepening recession in Europe and escalating unrest in African crude producer Nigeria.

In morning trade, New York's main futures contract, light sweet crude for June delivery, was down 15 cents to $56.19 a barrel. Brent North Sea crude for delivery in July eased seven cents to $55.91. Fresh signs the worst may not be over for Europe have raised concerns over dwindling oil demand and dampened hopes for an early rebound for the ailing global economy.

The 16-nation eurozone economy contracted a record 2.5 percent in the first three months of the year after shrinking 1.6 percent in the last quarter of 2008, the Eurostat agency said last week. "The euphoria and embrace of the economic recovery theory had a reality check," said John Kilduff of MF Global.

Nigerian troops meanwhile launched a military operation over the weekend in the oil-producing Niger Delta region and freed 13 hostages, including nine Filipino sailors. Rebels from the Movement for the Emancipation of the Niger Delta (MEND) last week attacked two ships and captured the sailors following a warning to oil companies operating there to withdraw their staff.

MEND also said it had sabotaged two recently repaired pipelines at the weekend, and vowed to step up its destruction of oil pipelines. Oil prices remain well below record highs above $147 reached last July, before the global financial crisis accelerated in the final months of 2008, hitting demand.