Aug 5 (Reuters) -ICE cotton futures dipped to their lowest level in nearly four years on Monday, weighed down by a decline in global stocks and downbeat sentiment in oil and grains that further pressured the natural fiber amid weak demand.

* Cotton contracts for December CTZ4 fell 0.91 cents, or 1.33%, to 67.34 cents per lb at 11:51 a.m. EDT (1551) GMT, having hit its lowest level since Oct. 2020 earlier in the session.

* "Traders are fearing the United States economy will enter a recession. The stock market is down, crude oil is down... (cotton) is suffering from heavy duty selling, although it is actually a lack of buying," said Keith Brown, principal at cotton broker Keith Brown and Co in Georgia.

* Oil fell on Monday, trailing a stock market selloff, though declines were limited by Libyan supply losses and worries that spreading conflict in the Middle East could further hit crude supplies. O/R

* Lower oil prices make cotton-substitute polyester less expensive.

* Weighing on the natural fiber, Wall Street's main indexes slumped on Monday as fears of the United States tipping into recession following weak economic data last week rippled through global markets. .N

* Meanwhile, Chicago wheat, corn and soybeans also fell weakened by a sudden slump in global financial markets. GRA/

* Although hurricane Debby has hit, the possible recession and resulting lower demand could have a greater impact on the market than these weather conditions, said Brown, adding that if the situation in Bangladesh intensifies that would be bearish for cotton.

* Bangladesh Prime Minister Sheikh Hasina resigned and fled the country on Monday after hundreds of people were killed in a crackdown on demonstrations that began as protests against job quotas and swelled into a movement demanding her downfall.

* Cotton speculators increased their net short position by 1,174 contracts to 52,415 in the week to July 30.

Reporting by Anmol Choubey in Bengaluru; Editing by Shailesh Kuber