* Crude stocks, especially at Cushing, depressing prompt WTI
* More U.S. jobless than forecast but retail sales better
* Strong dollar weighing on crude
(Updates throughout)
By Christopher Johnson
LONDON, Feb 12 (Reuters) - Front-month U.S. oil futures fell
below $35 a barrel on Thursday, dragged down by an overhang of
crude oil stocks in the United States and also depressed by
concerns over the health of the global economy.
U.S. crude for March delivery was particularly negative
after news on Wednesday of another big build in stocks at
Cushing, Oklahoma, the delivery point for NYMEX futures.
Crude oil stocks at Cushing are now at record levels at
around 35 million barrels, close to operational capacity,
traders say, and at a level that is forcing up the cost of
storage in the area and driving down the value of prompt crude.
News of another rise in U.S. jobless claims and a slide in
stock markets also depressed the oil market, traders said.
U.S. West Texas Intermediate (WTI) light crude for March
delivery <CLc1> was down $1.40 at $34.54 at 1511 GMT.
London Brent crude for March <LCOc1>, which was due to
expire later on Thursday, was down 26 cents at $44.02,
stretching its premium over U.S. oil to around $9.50, not far
off record levels above $11.50 hit last month.
"Post U.S. oil statistics yesterday that showed another
build in U.S. crude inventories, we are probably going to see
WTI maintain or worsen its discount to Brent," said Harry
Tchilinguirian, analyst at BNP Paribas in London.
TOLL
Evidence of growing U.S. unemployment had also cast a pall
over the market: "The figures confirm economic conditions will
endure until at least the third quarter," he said.
Global economic downturn is taking its toll on oil
consumption and supply still appears to be outstripping demand
in many parts of the world, despite production cuts by members
of the Organization of the Petroleum Exporting Countries.
Traders said the short-term direction of the market was
being dominated by movements in stock markets, which opened
lower in New York on Thursday, and the dollar, which rose
against a basket of major currencies. [] []
Oil has tumbled more than 10 percent this week on demand
worries and fears a U.S. bank rescue plan would not go far
enough to revive the ailing financial sector.
Oil prices took a battering on Wednesday after the U.S.
Energy Information Administration said domestic crude stocks had
increased 4.7 million barrels to 350.8 million in the week to
Feb. 6, against a forecast for a rise of 3.1 million. []
The latest increase in U.S. crude stocks comes on the heels
of a combined rise of more than 13 million barrels in the prior
two weeks, and crude inventories are now moving significantly
above their five-year range.
Oil's losses were further exacerbated by a separate report
from the International Energy Agency forecasting global demand
to contract by nearly a million barrels per day (bpd) -- the
most since 1982 -- to 84.7 million bpd in 2009. []
(Additional reporting by Fayen Wong in Perth; editing by James
Jukwey)
