* Year-end profit taking weighs on crude prices
* U.S. crude, gasoline stocks fell last week - EIA
* U.S. jobless claims at lowest since 2008
(Recasts, updates prices; changes byline, moves dateline from
LONDON)
By Robert Gibbons
HOUSTON, Dec 30 (Reuters) - U.S. crude oil prices fell
sharply on Thursday as investors focused on booking year-end
profits after the recent jump by oil to above $91 a barrel,
shrugging off supportive economic data and a government report
showing crude oil inventories fell last week.
Oil prices briefly pared losses when the government said
that U.S. crude oil stockpiles fell 1.26 million barrels last
week, less than expected but contrary to the industry report
late Wednesday showing a crude stocks build.
Oil prices fell despite news that initial claims for
jobless aid in the United States fell to their lowest level in
more than two years last week and Midwest factory activity grew
in December at its fast pace since 1988. Another report showed
pending sales of previously owned homes rose more than expected
in November. []
Analysts noted that, in addition to the incentive to book
profits at year's end, the positive economic data might cause
the U.S. Federal Reserve to curb its recent initiatives to spur
economic recovery, which could strengthen the dollar and limit
price boosts for dollar-denominated commodities.
U.S. crude oil for February delivery <CLG1> fell $1.93, or
2.12 percent, to $89.19 a barrel at 1:25 p.m. EST (1825 GMT).
Prices traded range bound near $91 a barrel after touching
a 26-month high of $91.88 a barrel on Monday.
"While the weekly (unemployment) claims number is
supportive on its face, a continuation of that level or lower
would allow the Fed to curtail further quantitative easing
plans for 2011, bolstering the dollar and keeping a lid on
commodity prices," said John Kilduff, a partner at Again
Capital LLC in New York.
Total U.S. crude futures trading volume has been thin
during the holiday week and was above 294,000 lots after midday
in New York, compared with the 30-day average of 576,181.
In London, ICE Brent crude for February <LCOc1> fell $1.55
to $92.59 a barrel.
"The market environment is still very solid but you will
see a bit of taking off risk before year end," Barclays analyst
Amrita Sen said.
U.S. equities edged lower as the recent rally and light
volume left investors reluctant to take on much more risk
before the new year. []
CRUDE INVENTORIES FALL AGAIN
U.S. crude stocks eased by 1.26 million barrels to 339.43
million barrels in the week to Dec. 24, the Energy Information
Administration said on Thursday, less than the drop of 2.6
million barrels analysts had expected. []
Crude inventories fell for a fourth straight week,
according to EIA data, as companies allowed stocks to slide for
end-year accounting purposes.
The EIA's data contradicted an industry report from the
American Petroleum Institute on Wednesday that showed crude
supply rose last week by 3.1 million barrels. []
Crude stocks at the delivery hub for the U.S. crude
contract at Cushing, Oklahoma, rose 245,000 barrels to 36.64
million as of Dec. 24, the EIA said.
Cushing inventories fell 117,946 barrels to 40.025 million
barrels in the week to Dec. 28, according to industry tracker
Genscape's data released on Thursday. []
Gasoline stocks fell by 2.32 million barrels, the EIA said
on Thursday, after analysts had forecast a 1.4-million-barrel
rise. Distillate inventories, which include heating oil and
diesel fuel, rose 243,000 barrels, against analysts'
expectations for a 600,000-barrel draw.
With crude stocks slipping four straight weeks and prices
jumping above $90 a barrel, OPEC output has risen only slightly
in December as Nigerian supply increased, a Reuters survey
found on Thursday.
Supply from the 11 OPEC members with output targets has
averaged 26.75 million barrels per day this month, up from
26.70 million bpd in November, according to the survey of oil
companies, OPEC officials and analysts. []
(Additional reporting by Zaida Espana in London and Randy Fabi
in Singapore; Editing by Walter Bagley)
