* US jobless claims, Wal-Mart results feed economic gloom
* US crude stockpiles high, Cushing at record
* Russia gas row, Mideast violence, OPEC cuts help support
(Updates prices with U.S. settlement, latest Brent trade)
By Richard Valdmanis
NEW YORK, Jan 8 (Reuters) - Oil prices fell another 2.2
percent on Thursday as deepening economic gloom and soaring
crude inventories in the United States eclipsed geopolitical
tensions that have put world supplies at risk.
The decline followed Wednesday's 12 percent drop, which
marked the biggest daily percentage decline in the price of
crude oil in more than seven years.
"This morning crude was trying to rally a bit, but more
(economic) figures kept coming out from the U.S. and they were
very bearish indeed," said Sucden trader Rob Montefusco.
U.S. crude for February delivery <CLc1> fell 93 cents to
settle at $41.70 a barrel, while London Brent crude <LCOc1>
fell 97 cents to $44.89 a barrel.
Oil prices have dropped more than $100 a barrel since July
as a global financial crisis has cut consumer and business
energy demand, threatening to shrink total world oil usage for
the first time in 25 years.
A U.S. government report on Thursday showed the number of
people remaining on jobless rolls last week rose to a 26-year
high, even as new claims for unemployment benefits slipped.
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Adding to the economic gloom, Wal-Mart Stores Inc <WMT.N>,
which accounts for a 10th of U.S. retail spending, reported a
disappointing sales performance in December and cut its
earnings outlook. []
Oil prices tumbled on Wednesday after the U.S. Energy
Information Administration's weekly report showed crude stocks
rose last week by 6.7 million barrels, more than seven times
the 900,000-barrel increase analysts had expected. []
"Brent is done going under $40, but WTI (U.S. crude) 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.
Crude oil stocks in Cushing, Oklahoma, the delivery point
for U.S. crude futures, rose 4.1 million barrels last week,
reaching a record high of 32.2 million barrels.
Prices had gained some support earlier from violence in
Gaza, widening natural gas supply disruptions due to a dispute
between Russia and Ukraine, and mounting evidence of OPEC's
compliance with production cuts.
Three rockets fired from Lebanon struck northern Israel,
slightly wounding two people and prompting the Jewish state to
respond with artillery fire, officials said. []
While the conflict did 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 supply dispute
at a meeting in Moscow, but will continue talks to end the
confrontation, which has choked off supplies to Europe, a
senior Ukrainian gas official said on Thursday. []
The dispute has cut heating fuel supplies 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 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 Chris Baldwin in London and Jennifer
Tan in Singapore; Editing by David Gregorio)
