COMMODITIES-Oil falls on economic woes, Mideast turmoil on radar
* Oil falls as jobless claims jump
* Mideast violence on radar of oil traders
* Growing stocks weigh Arabica coffee
* Gold tracks equities markets lower
By K.T. Arasu
CHICAGO, Nov 15 (Reuters) - Oil prices tumbled on Thursday as a hefty unexpected jump in the weekly U.S. jobless data and disappointing corporate earnings renewed concerns over the economy, while Arabica coffee fell to a two-year low under the weight of a growing stockpile.
Soybeans at the Chicago Board of Trade erased gains from a day earlier amid prospects for ample global supplies, with the weather largely favoring bumper crops in South American agricultural powerhouses Brazil and Argentina early next year.
Gold fell to a one-week low, tracking world equities markets that slipped for a seventh straight day amid concerns over looming tax increases and spending cuts worth about $600 billion in the United States next year.
There were no signs of detente in the standoff between U.S. Democrats and Republicans over how to resolve the problem referred to as the 'fiscal cliff' that some analysts say could send the United States careening back into a recession in 2013.
"Brinkmanship on the fiscal cliff is likely to remain high," said John Silvia, chief economist at Wells Fargo Securities in Charlotte, North Carolina.
The Thomson Reuters-Jefferies CRB index, a global indicator for commodity investors, fell 0.4 percent to 292.85.
OIL EYES MIDEAST VIOLENCE
Oil futures settled lower as data showed that the euro zone had slipped into its second recession since 2009 in the third quarter, and a jump in U.S. jobless claims and lackluster corporate earnings brought focus back to the economy.
Traders were closely monitoring the escalating violence between Israel and Palestinians in Gaza for any signs of the conflict affecting the flow of supplies from the region.
On Thursday, two rockets fired from Gaza targeted Israel's commercial capital of Tel Aviv for the first time in 20 years. Earlier, three Israelis were killed by a Hamas rocket.
"Until there is a clear sign that the instability in the region is spreading toward the oil-producing states, market participants are likely to approach this situation with caution and not overreact to the upside," said Dominick Chirichella of New York's Energy Management Institute.
"That said, as long as the tensions and military activity continue to evolve, oil prices should find some price support in the short term," Chirichella added.
London's January Brent crude oil settled at $108.01, down 47 cents; the expiring December rose $1.37 to end at $110.98 a barrel. U.S. crude fell 87 cents, or 1 percent, to settle at $85.45 a barrel in New York.
SOYBEANS FALL ON EASING SUPPLY CONCERNS
Soybeans fell sharply in Chicago, weighed by easing concerns over supplies in the aftermath of the worst drought in half a century in the United States, the world's top grains exporter.
Prices were hovering near their lowest level in about 4-1/2 months amid the prospects of bumper crops in Brazil and Argentina, the world's second and third largest exporters, respectively, after the United States.
In a monthly report last week, the U.S. Department of Agriculture raised its estimate of the crop in the United States due to timely summer rains in August benefitting the plants that were in a critical stage of development at the time.
"We're still getting over last week's crop increase, and things are going fairly well in South America," said Jim Gerlach, president of A/C Trading.
Some traders attributed the selling to concerns over the economy slipping back into a recession if Congress and President Barack Obama do not find a resolution to the budget battle.
"It's the psychological weight," said Don Roose, president of U.S. Commodities brokerage.
CBOT January soybean futures fell 17 cents, or 1.2 percent, to $14.02 per bushel. Prices have fallen about 28 percent since peaking at $17.94-3/4 on Sept 4.
ARABICA COFFEE AT 2 YEAR LOW, COCOA STRENGTHENS
Arabica coffee futures on ICE slumped to their lowest level in two years amid rising stocks before bouncing back.
"The current Arabica supply picture is comfortable and stocks are building," brokers Marex Spectron said in a report, adding that a large Brazilian crop had allowed for re-stocking internally as well as for exports.
Cocoa futures rallied for a second day amid concerns over supplies following an unexpected dissolution of the government in Ivory Coast, the world's top producer.
Some traders felt the rally could be shortlived due to an expected bumper crop in Ivory Coast, which produces about 35 percent of the world's cocoa.
"The rally is not sustainable. Fundamentally, there is nothing to justify this rally. The Ivory Coast still has its mid-crop to sell and Europe's in recession," said a hedge fund manager.
ICE March cocoa settled up $26, or 1.06 percent, at $2,483 per tonne after hitting an intraday high of $2,488.
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