* European stocks drop 1.5 percent as BP (L:BP), UBS add to oil woes
* Crude futures extend overnight fall on oversupply fears
* Dollar dips vs yen and euro, rises against EM currencies
* Wall Street set to start lower, Exxon results due
By Marc Jones
LONDON, Feb 2 (Reuters) - World stocks ended three days of gains on Tuesday as lacklustre global economic data led to another slump in oil prices.
Oil LCOc1 fell 5 percent after dropping as much as 7 percent the previous session, and the glum macro mood left Wall Street set for 0.9 to 1.1 percent declines after losses in both Europe .FTEU3 and Asia .MIAPJ0000PUS .
Oil fell after BP announced its biggest loss in 20 years and plans to cut thousands of jobs, Exxon Mobil (N:XOM) reported its profits plummeted and S&P cut the ratings of Shell (L:RDSa) and BHP Billiton (L:BLT). fell 1.2 to 2 percent in London .FTSE , Frankfurt GDAXI and Paris .FCHI as oil and gas shares dropped.
Banks .SX7E and Swiss stocks .SSMI also took a bashing. UBS
Sterling reached a three-week high as European Council President Donald Tusk presented proposals for keeping Britain in the European Union GBP= . UK Prime Minister David Cameron said the plans showed "real progress" although there was "more work to do" don't think the market has much of a clue on what to focus on," said John Hardy head of FX strategy. "It doesn't seem too convinced with the narrative of hooray for central bank liquidity again, and the oil price going down and whole reserve destruction theme is bad for risk appetite."
The lure of relative safety saw gains for benchmark U.S. and European government bonds. Euro zone yields got an extra kick lower from European Central Bank President Mario Draghi's reiteration on Monday that the ECB may cut rates again next month GVD/EUR .
Oil still dominated the moves, though. Brent and U.S. crude LCOc1 CLc1 fell $32.98 and $30.65 a barrel respectively, having lost as much as 7 percent overnight. O/R
Oil fell amid weak economic data from China, Europe and the United States and doubts that oil-producing countries will cut output in the face of a global supply glut O/R . Oil production in Russia rose to a post-Soviet high in January, the latest data from its energy ministry showed hard to see a successful agreement between OPEC and Russia to cut production, and people are starting to see that," said Andy Sommer, senior energy analyst at Axpo Trading in Dietikon, Switzerland.
EMERGING PRESSURES
In the United States, oil giant Exxon Mobil XOM.N was the top draw after BP's woes. It is the world's largest publicly traded oil company, and said it would slash capital spending by a quarter after its profit halved in the fourth quarter. appeared little fazed by the results of Iowa's caucus for the U.S. presidential nomination. Among Republicans, U.S. Senator Ted Cruz beat Donald Trump. For the Democrats, former Secretary of State Hillary Clinton was in a virtual tie with rival Bernie Sanders. dollar climbed as much as 1 percent the rouble RUB , the rand ZAR= , Mexico's peso MXN= and Malaysia's ringgit MYR= . Emerging market stocks fell 1.5 percent .MSCIEF after four days of gains. FRX/EMRG
Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS had lost 1.2 percent. Stocks fell almost everywhere except China .CSI300 , which saw a 2 percent bounce.
Tokyo's Nikkei .N225 ended down 0.6 percent after two days of gains following the Bank of Japan's move to negative interest rates late last week .T . The Australian dollar AUD= also slipped after the country's central bank kept rates unchanged but left the door open to further easing reporting by Karin Strohecker; editing by Larry King)