* U.S. oil settles at lowest point in nearly two months
* Prices have fallen 17 percent in five trading days
* U.S. inventory glut keeping U.S. oil below Brent
* More U.S. jobless than forecast
* Brent losses tempered by Nigeria supply problems
(Updates prices with settlements, adds comment from Algeria
oil minister)
By Richard Valdmanis
NEW YORK, Feb 12 (Reuters) - U.S. oil prices fell 5.5
percent on Thursday to settle at the lowest point in nearly two
months, dragged down by swelling crude stocks in the United
States and concerns over the health of the global economy.
U.S. crude <CLc1> dropped $1.96 to settle at $33.98 a
barrel, the lowest since Dec. 19 and extending a losing streak
that has clipped 17 percent off the price in five days. Brent
crude <LCOc1> rose 37 cents to $44.65 a barrel.
U.S. crude has been running at a big discount to Brent due
to a glut at the main U.S. storage hub in Oklahoma along with
supply problems in Nigeria that tend to have a bigger impact on
European supplies.
The losses came after the U.S. government reported on
Wednesday a seventh straight weekly increase in nationwide
crude inventories as the economic crisis crushes business and
consumer fuel demand.
Crude oil stockpiles at Cushing, Oklahoma -- the world's
biggest storage hub and the delivery point for U.S. crude
futures -- rose last week to record levels around 35 million
barrels, near operational capacity.
"Much of today's pressure on crude still comes from
yesterday's data showing a big jump in U.S. crude supply,
including at the NYMEX delivery point in Cushing, Oklahoma,"
said Andy Lebow, broker at MF Global in New York.
"There is also anticipation that crude stocks will
continue to build in the weeks to come," he added.
Encouraging losses Thursday, the U.S. Labor Department said
the number of people staying on unemployment benefits rose by
11,000 to a record 4.810 million in the last week of January.
[]
"What that's telling us is the underlying trend is bad and
seems to be getting worse. For job losses, February could be
worse than January," Nigel Gault, chief U.S. economist at
Global Insight in Lexington, Massachusetts, said.
The global economic downturn is taking its toll on oil
consumption and supply appears to be outpacing demand in many
parts of the world, despite production cuts by members of the
Organization of the Petroleum Exporting Countries.
Algerian Oil Minister Chakib Khelil told Reuters on
Thursday that there is a 50 percent chance the cartel could
agree to deepen cuts when it meets in March, and added that
compliance among members is solid. []
"We have 85 percent which is unusual for compliance. By
meeting time, we will probably have 100 percent," Khelil said.
U.S. oil's losses were further exacerbated by a report
Wednesday from the International Energy Agency forecasting
global demand would shrink this year by the largest amount
since 1982.
Traders said the short-term direction of the market was
also being dominated by movements in stock markets, which were
lower in New York on Thursday. []
Brent crude was supported somewhat by news Shell <RDSa.L>
may have trouble meeting some oil export obligations due to
unrest in the Niger Delta. []
(Additional reporting by Christopher Johnson in London, Fayen
Wong in Perth; Editing by Marguerita Choy)
