* Further builds in U.S. crude stocks weigh on prices
* Q4 GDP data to show economy at its weakest in 26 years
(Updates throughout, previous SINGAPORE)
By Joe Brock
LONDON, Jan 29 (Reuters) - Oil dropped below $42 a barrel on
Thursday, as data showing a further build in crude stocks in the
United States heightened expectations of falling demand for oil
from the world's largest fuel consumer.
The market will watch for weekly jobless claims and December
durable goods orders later on Thursday, as well as advance
fourth-quarter gross domestic product data on Friday, for
further clues on the health of the U.S. economy.
U.S. crude <CLc1> fell 35 cents a barrel to $41.81 by 0930
GMT, while London Brent crude <LCOc1> lost 6 cents to $44.84.
"U.S. crude has weakened again. The 300,000 barrel stock
build in Cushing and the general crude stock build has caused
this," said Christopher Bellew, a broker at Bache Commodities in
London.
U.S. crude oil inventories jumped last week for the fifth
week in a row amid lower demand from domestic refiners curbing
operations for first-quarter maintenance programs or for
economic reasons, government data on Wednesday showed.
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MORE GRIM DATA
Expectations that data to be released later in the day is
likely to give a grim reading of the U.S. economy weighed on
market sentiment and sparked an early bout of selling.
Durable goods orders, due at 1330 GMT, are estimated to have
fallen 2.0 percent in December after a 1.5 percent decline in
November, economists polled by Reuters said.
U.S. weekly jobless count is expected to show that 580,000
people filed new claims for state unemployment insurance in the
week ended Saturday, following a week with 589,000 new claims.
All eyes will be on the government's first snapshot of the
U.S. economy in the fourth quarter, due on Friday, which will
show it at its weakest in 26 years, hit by plunging consumer
spending and surging unemployment rates. []
Remarks by OPEC Secretary General Abdullah al-Badri at the
World Economic Forum in Davos, Switzerland that OPEC would not
hesitate to act again if oil price remains low offered support
to crude prices. []
OPEC's output cuts since second-half 2008, in reaction to
the fall of more than $100 in oil prices since July, have also
helped to put a floor under prices.
Badri said on Wednesday OPEC is expected to have fully
delivered on its pledged supply curbs by the end of this month,
but a weak economy would continue to erode demand for fuel.
OPEC next meets on March 15 to decide output policy.
Martin King, analyst with FirstEnergy Capital Corp, said
OPEC had done a much better job of cutting supplies from the
market than many had expected, setting the stage for a gradual
price rebound in the second half of 2009.
"We see the crude market on the cusp of achieving real signs
of stability, driven in part by tighter supplies out of OPEC."
(Additional reporting by Farah Master in London and Jennifer
Tan in Singapore; editing by James Jukwey)
(joe.brock@thomsonreuters.com; +44(0)542 9162; Reuters
Messaging: joe.brock.reuters.com@reuters.net)
