* Advance Q4 GDP data to highlight faltering U.S. economy
* Record fall in Japan's Dec industrial output
* Losses limited by possible U.S. refinery strike, OPEC
cuts
(Updates prices)
By Jennifer Tan
SINGAPORE, Jan 30 (Reuters) - Oil stayed below $42 a barrel
on Friday, after falling nearly 2 percent overnight, weighed
down by another round of grim U.S. economic data reflecting
faltering demand in the world's top energy consumer.
Investors will focus on the release of advance
fourth-quarter gross domestic product data due later in the day
for more clues on the outlook of the U.S. economy.
By 0705 GMT, U.S. crude was up 15 cents a barrel at $41.59,
off an intraday low of $41.31, while London Brent crude gained
10 cents to $45.50.
Oil has fallen nearly 11 percent over the past week and is
down 6.8 percent from December, which would be its best
performance since end-August.
Oil sank 1.7 percent on Thursday after reports underscored
a deepening recession in the United States. The jobless rate
rose to a record peak in January, while in December sales of
new U.S. single-family homes fell to the lowest level ever and
new orders for durable long-lasting manufactured goods tumbled
for a fifth month.
Shrinking demand for fuel has also contributed to the
biggest four-month build-up in U.S. crude stockpiles since
1990.
"The risk is still clearly on the downside. The economic
data is going to confirm that things are still slowing down,"
said Mark Pervan, senior commodity strategist at ANZ Bank in
Melbourne.
"Oil's big Achilles heel is the U.S. market, and that's
going to continue to weigh on prices."
All eyes will be trained on the government's first snapshot
of the U.S. economy in the fourth quarter, due at 1330 GMT,
which will show it at its weakest in 26 years.
The dismal forecast comes atop the International Monetary
Fund's projection on Wednesday that world economic growth this
year will fall to its slowest since World War Two.
Unemployment in Germany, Europe's largest economy, rose
nearly twice as much as expected in January.
Asia's outlook was equally bleak. Data showed unemployment
in Japan at a near three-year high and industrial output
plunging by a record 10 percent last month, reinforcing
expectations of a unprecedented contraction in the world's
second-largest economy.
DEEPER SUPPLY CURBS
But oil's losses were limited by a potential U.S. oil
refinery worker strike that could affect gasoline and heating
oil output, as well as Qatar's deepening supply curbs in March.
A possible strike by 30,000 U.S. refinery workers
threatened on Thursday to shutter more than half of the
nation's oil refining capacity, though a top union negotiator
expressed optimism a deal could be reached before Sunday's
deadline.
Qatar, one of OPEC's smallest oil producers, has notified
at least two Asian term buyers that it will deepen curbs on
supplies of Qatar Marine crude in March compared with February
levels, traders said on Friday.
OPEC's supply cuts since second-half 2008, in reaction to
the fall of more than $100 in oil prices since July, have
helped support the market.
OPEC Secretary General Abdullah al-Badri said at the World
Economic Forum in Davos, Switzerland that the cartel would not
hesitate to act again if the oil price remained low, after
remarking earlier this week the group would fully enforce
supply curbs by the end of this month.
The cartel next meets on March 15 to decide output policy.
Pervan expects oil to trade in the mid- to low-end of a $30
to $40 range through February, with firm support around
$31-$32.
"There's a lot of sideline interest to get back into the
market on the basis that there's actually a very strong
long-term outlook for oil," he said.
"In the short to medium term, there's going to be more
pain, and the volatility will continue through February, as we
go through a run of pretty weak economic data out of the U.S."
(Editing by Ben Tan)
(jennifer.tan@thomsonreuters.com; +65-6417 4679; Reuters
Messaging: jennifer.tan.reuters.com@reuters.net)
