* U.S. jobless claims data due later
* Friday U.S. jobs data could add to bearish outlook
* Russian gas row, OPEC cuts may support prices
By Jennifer Tan
SINGAPORE, Jan 8 (Reuters) - Oil hovered below $43 on
Thursday after tumbling 12 percent overnight, its largest
percentage drop in seven years, as a U.S. government report
showed crude stocks rose much more than expected in the world's
top energy consumer.
The market will be eyeing weekly U.S. jobless claims due
later in the day, and December non-farm payroll and
unemployment data on Friday, which are likely to be dismal, for
further clues on future demand.
U.S. crude for February delivery <CLc1> was up 14 cents at
$42.77 a barrel by 0230 GMT, after sinking 12.3 percent to
$42.63 overnight, the biggest single-day percentage loss since
Sept. 24, 2001.
London Brent crude <LCOc1> was up 8 cents at $45.94.
"Oil prices are likely to remain choppy, and in the near
term, the next potential trip-wire is U.S. non-farm payrolls
data on Friday, which is likely to add to concerns over the
U.S. economic outlook," said David Moore, a commodity
strategist with the Commonwealth Bank of Australia.
Overnight data from the U.S. Energy Information
Administration (EIA) showed that crude stocks swelled by 6.7
million barrels, more than seven times the 900,000-barrel
increase analysts had expected. []
Adding to the gloomy outlook, a bearish reading on private
sector payrolls from ADP Employer Services on Wednesday
signalled more weakness in the more comprehensive employment
data report from the U.S. Labor Department due on Friday.
The ADP data showed that private employers shed 693,000
jobs in December, up from 476,000 jobs in the prior month and
far more than economists estimated. []
The Labor Department will also release weekly first-time
claims for jobless benefits later on Thursday. Economists in a
Reuters survey forecast a total of 540,000 new filings compared
with 492,000 in the prior week.
"By and large, (Wednesday's) data reinforced our opinion
that the weak global oil demand argument is still very much
alive and well and capable of forcing crude values back to the
low- to mid-$30 region," Jim Ritterbusch, president of
Ritterbusch & Associates, wrote in a commentary.
Oil has fallen more than $100 from a record peak of over
$147 a barrel in July, as the global economic downturn hits
demand for fuel. It settled at $33.87 a barrel on Dec. 19, the
lowest level since Feb. 10, 2004.
Mounting evidence of OPEC's compliance with production cuts
and widening supply disruptions from a natural gas row between
Russia and Ukraine could provide some price support, analysts
said. Signs of OPEC members implementing the group's
biggest-ever output cuts grew this week after Kuwait and Iran
told customers of bigger supply curbs this month in a bid to
prop up prices. []
Russia shut down all gas flows to Europe through Ukraine on
Wednesday and told Kiev it would restore supplies only after
the latter had agreed to pay full market prices.
[]
The dispute has cut heating to tens of thousands of households
in Bulgaria and hit supplies as far west as France and Germany
as Europe faced freezing mid-winter temperatures.
The bleak economic data overshadowed the intensifying Gaza
conflict, which had underpinned oil prices earlier in the week.
Israeli aircraft and tanks pounded the Gaza Strip on
Wednesday and troops battled Palestinian guerrillas on the
ground as U.S. backing for a proposed truce raised expectations
of an end to the 12-day-old offensive. []
While the conflict does not directly threaten any oil
supplies, Middle East unrest can bolster prices because
countries in the region pump about a third of the world's oil.
(Reporting by Jennifer Tan; Editing by Clarence Fernandez)
(jennifer.tan@thomsonreuters.com; +65-6417 4679; Reuters
Messaging: jennifer.tan.reuters.com@reuters.net)
