Actually, nowadays, I think any supervisor is ecstatic and tickled pink if a student indicates they are going to stay in science. I think they still feel a great loss if a student goes to Wall Street, law school, or something else. He might just write a great letter to help the cause.
I don't think asking for a letter will affect your working relationship if that's what you were asking. He might be eye-balling you more within the next few weeks after you ask him, but I'm sure his impressions are well formed already. It could actually be the best time to ask for one, since you are fresh in his mind. But, what I've found, is letter writers are very agreeable when they still need you for something. He might want you to publish later and continue getting results, so he still needs you for something.
The only sticky situations I have found of if they want to stay on with them and then you ask for a letter to go to another opportunity. I've had those offers from supervisors, i.e. if you stay with me then I'll write a glowing letter. Those would be bribe letters. But, I don't think you have this situation.
Speaking of @tnoviell's comment: there's a young Adam Sandler in lafflink.com. He said the same thing - a friend told him to ask a girl out and the worst that can happen is she will say no. But, when he did that the girl said 'no, you loser'. That guy is very funny.
But, with letters, I've heard of other worsts: they say yes and never write the f'in letter, or they say yes and don't write a strong one. But, this won't happen if you are working for someone because of the 'they still need you' thing and because since you are still there he wouldn't keep on someone who wasn't good.
I think profs. also tend to take graduate school seriously, like its a big thing and a big step.
Don't worry. Just ask. You might start by telling him your plans etc..