* Further builds in U.S. crude stocks weigh on prices
* Q4 GDP data to show economy at its weakest in 26 years
* Signs OPEC may cut output further offers support
(Updates prices, adds Japanese demand)
By Joe Brock
LONDON, Jan 29 (Reuters) - Oil fell more than $1 towards $41
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 $1.09 a barrel to $41.07 by 1246 GMT,
while London Brent crude <LCOc1> lost 31 cents to $44.59.
"U.S. crude has weakened against Brent 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.
However, Bellew added "Run cuts and OPEC production cuts may
offer some support."
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.
[]
Data on Friday will probably show Japanese oil demand last
year fell by its most in 26 years, a third successive decline as
the world's most efficient major energy user found new ways to
conserve fuel after prices surged and a recession grabbed hold.
[]
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.
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. []
Royal Dutch Shell Plc <RDSa.L> reported a big drop in
fourth-quarter net profits on Thursday, missing analysts'
forecasts, but the oil major eased investor fears about
cashflows by raising its dividend while lifting planned
investments. []
(Additional reporting by Farah Master in London and Jennifer
Tan in Singapore; editing by Peter Blackburn)
(joe.brock@thomsonreuters.com; +44(0)542 9162; Reuters
Messaging: joe.brock.reuters.com@reuters.net)
