* U.S. jobless claims mixed
* U.S. crude stock data higher than expected
* Russia gas row, Mideast violence, OPEC cuts help support
(Updates prices, adds comment)
By Chris Baldwin
LONDON, Jan 8 (Reuters) - Oil fell on Thursday to below $42,
after a 12 percent drop overnight, weighed by mixed U.S. jobless
data and higher than expected crude stocks that hardened
evidence of weakening demand.
U.S. crude for February delivery <CLc1> was down 95 cents at
$41.68 a barrel by 1356 GMT, after sinking 12.3 percent
overnight to $42.63, its biggest one-day percentage loss since
Sept. 24, 2001.
London Brent crude <LCOc1> fell 31 cents to $45.55.
Earlier, crude traded up by $1.00, touching $43.63.
"This morning crude was trying to rally a bit, but more
figures kept coming out from the U.S. and they were very bearish
indeed," said Sucden trader Rob Montefusco.
The number of U.S. workers filing new claims for
unemployment benefits fell unexpectedly by 24,000 last week,
government data showed on Thursday, but the number of people
remaining on jobless rolls rose to a 26-year high. []
Initial claims for state unemployment insurance benefits
fell to a seasonally adjusted 467,000 in the week ended Jan. 3
from a slightly downwardly revised 491,000 the prior week, the
U.S. Labor Department said.
Analysts polled by Reuters had forecast 540,000 new claims
versus a previously reported figure of 492,000.
Oil had taken a battering after U.S. Energy Information
Administration (EIA) data on Wednesday showed crude stocks up
6.7 million barrels, more than seven times the 900,000-barrel
increase analysts expected. []
"Brent is done going under $40, but WTI is a different
animal altogether...crude stocks in the Midwest are very high
because Cushing is a landlocked base with pipes that only go in
one direction," Christopher Bellew of Bache Financial said.
CUSHING STORAGE
Crude oil storage at the Cushing, Oklahoma storage hub rose
4.1 million barrels to 32.2 million barrels in the week to Jan.
2, according to Wednesday's EIA data, a new record that may test
capacity, an official at the EIA said. []
Prices had gained some support from violence in Gaza,
widening natural gas supply disruptions due to a 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.
[]
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 failed to resolve a gas row at a meeting
in Moscow but will continue talks to end the dispute which has
choked off supplies to Europe, a senior Ukrainian gas official
said on Thursday. []
The dispute has cut heating to hundreds of thousands of
people across the Balkans and hit supplies as far west as France
and Germany as Europe faces freezing temperatures.
Signs that members of the Organization of the Petroleum
Exporting Countries (OPEC) are implementing the group's
biggest-ever output cuts grew this week after Kuwait and Iran
told customers of bigger January supply curbs. []
(Additional reporting by Jennifer Tan in Singapore; editing by
Sue Thomas)
