Oil edged above $55 a barrel on Tuesday after settling at its lowest in nearly 22 months, as fears mounted that the worsening global economic slump is trimming fuel demand further.

Japan became the latest major economy to fall into recession and Citigroup said it would cut 52,000 jobs, one of history's largest layoffs.

US light crude for December delivery rose 16 cents to $55.11 a barrel at 0118 GMT, after settling at the lowest level since Jan. 29, 2007 in the previous session.

London Brent crude was untraded at the same time.

US crude has plummetted more than 60 percent from its July record above $147 a barrel as the credit crisis has hit the real economy and limited fuel use in top consumers such as the United States.

'Oil is still driven by concern about the weak outlook for oil consumption,' said David Moore, commodity strategist at Commonwealth Bank of Australia. 'Equity markets are not helping.'    

Japan's Nikkei share average slid 1.3 percent on Tuesday, dented by Wall Street losses overnight. And China became a net diesel exporter in October for the first time since August 2007 and remained a net gasoline exporter for a second month, as heavy inventories and higher refinery output lessened import needs.

That bodes ill for the global refining industry, which had counted on China's appetite for fuel stockpiling in the months leading to the August Olympics to pick up the slack left by a worldwide economic and consumption slump. - Reuters