* 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
(Updates with economic data paragraph 4 and trading volume
paragraph 6)
By Robert Gibbons
HOUSTON, Dec 30 (Reuters) - U.S. crude oil prices slumped
on Thursday, dropping below $90 a barrel, as investors focused
on booking year-end profits after the recent rally above $91,
shrugging off supportive economic data and a government report
showing crude inventories fell last week.
Falling gasoline stockpiles, expected holiday driving
demand and hopes that the economic recovery is strengthening
helped U.S. gasoline futures finish with a slight gain.
Crude oil prices briefly pared losses when the government
said U.S. crude oil stockpiles fell less than expected last
week, contrary to the industry report late Wednesday showing a
crude stocks build.
Oil prices fell despite news that U.S. initial jobless
claims fell to their lowest level in more than two years last
week, Midwest factory activity grew in December at its fast
pace since 1988 and pending sales of previously owned homes
were up more than expected in November. []
U.S. crude oil for February delivery <CLG1> fell $1.28, or
1.4 percent, to settle at $89.84 a barrel, trading from $89.02
to $91.40.
Total crude futures trading volume was thinned by the
holidays, with just over 386,000 lots traded compared to the
30-day average of 553,099 lots, according to Reuters data.
In London, ICE Brent crude for February <LCOc1> fell $1.05
to settle at $93.09 a barrel.
U.S. prices had traded range bound near $91 a barrel after
touching a 26-month high of $91.88 a barrel on Monday and
approaching the February crude contract high of $93.87.
Based on Thursday's settlement price, U.S. crude futures
were on track to end 2010 up about 13 percent from the Dec. 31,
2009, close of $79.36 a barrel. Prices ended 2009 up 78 percent
from the 2008 year-end settlement at $44.60, the biggest
percentage calendar year rise in a decade.
"We viewed today's sharp crude sell-off as more related to
year-end long liquidation that appeared facilitated by a few
block type orders than to any guidance out of this morning's
EIA report or economic releases," Jim Ritterbusch, president of
Ritterbusch & Associates in Galena, Illinois, said in a note.
U.S. equities ended lower as a recent rally and light
volume left investors reluctant to take on much more risk
before the new year. []
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.
"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.
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. Ahead of contract expiration on Friday, U.S. January
<RBF1> gasoline futures rose 0.14 cent to settle at $2.3918 a
gallon.
Distillate inventories, which include heating oil and
diesel fuel, rose 243,000 barrels, against analysts'
expectations for a 600,000-barrel draw.
Even with crude stocks slipping four straight weeks and
prices peeking 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 and David Gregorio)
