* U.S. jobless claims data due later
* Friday U.S. jobs data could add to bearish outlook
* Russia gas row, OPEC cuts, MidEast violence offer support
By Jennifer Tan
SINGAPORE, Jan 8 (Reuters) - Oil edged towards $43 on
Thursday on escalating violence in the Middle East, after
diving 12 percent overnight, its largest percentage drop in
seven years, as crude stocks in the United States rose more
than expected.
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 41 cents at
$43.04 a barrel by 0720 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 29 cents at $46.15.
"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.
Meanwhile, oil prices were supported by the deepening
conflict in Gaza, widening supply disruptions from a natural
gas row between Russia and Ukraine, and mounting evidence of
OPEC's compliance with production cuts. Three rockets fired
from Lebanon struck northern Israel on Thursday, slightly
wounding two people and prompting the Jewish state to respond
with artillery fire, officials said. It was not immediately
clear who fired the rockets. []
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.
Russia and Ukraine will argue their case to Europe on
Thursday in a gas price dispute that has choked off gas flows
to Europe beset by bitter winter weather. []
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 temperatures.
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.
[]
The producer cartel has cut output three times since
September, in a bid to halt the market's slide.
(Editing by Clarence Fernandez)
(jennifer.tan@thomsonreuters.com; +65-6417 4679; Reuters
Messaging: jennifer.tan.reuters.com@reuters.net)
