* U.S. crude falls on dour GDP, corporate profit data
* Brent edges up on weaker dollar, Mideast concerns
* Coming Up: CFTC positions data, 3:30 p.m. EDT Friday
(Recasts, updates prices to settlement and late market activity)
By Gene Ramos
NEW YORK, May 26 (Reuters) - U.S. crude fell more than 1 percent on Thursday as the U.S. economy grew less than expected in the first quarter, stoking fresh worries about oil demand.
Other U.S. economic data showing corporate profits shrank while weekly jobless benefit claims rose signaled a tough slog ahead to regain recovery momentum, further pressuring crude.
On the other side of the Atlantic, Brent crude eked out a tiny gain, as a weaker dollar supported and as geopolitical worries about the Middle East and North Africa persisted.
"Today's U.S. first quarter GDP estimate is disappointing and the job claims numbers were soft," said Bill O'Grady, chief market strategist at Confluence Investment Management in St. Louis, Missouri.
The latest U.S. growth estimate for the first quarter showed an unrevised 1.8 percent rise, but that was below expectations, and corporate profits unexpectedly shrank while weekly jobless benefit claims rose. [ID:nN26233734]
U.S. crude for July delivery
U.S. crude's discount against Brent crude rose to $14.82,
the highest since May 16, from $13.61 at Wednesday's close.
Trading was choppy in a day that saw prices mostly lower, erasing much of the 2 percent gain on Wednesday on the back of a sharp fall in U.S. distillate inventories.
The Reuters-Jefferies CRB index <.CRB>, a global commodities benchmark, was back down 0.3 percent late in the day, after having moved near flat earlier as the dollar weakened.
In late afternoon trade, the dollar was down 0.50 percent against a basket of major currencies. <.DXY>.
With the end of the day's trading still more than an hour away, U.S. crude's volume was near its 30-day average. In London, Brent's volume was down about 20 percent from its 30-day average.
GASOLINE REVS UP, MARKET DIP PROBABLY SHORT-LIVED?
Going against crude, U.S. gasoline for June delivery
The gasoline crack spread, which reflects refinery profit from processing crude into fuel, rose to the day's high of $26.31 a barrel, up from Wednesday's $24.12 and posting the highest since May 16's peak at $30.33.
The rise was prompted by expectations of better motor fuel demand, ahead of coming U.S. Memorial Day holiday weekend that kicks off the summer driving season.
News of Midwest refinery troubles involving Exxon Mobil's
While crude prices were down most of the day, analysts said further declines may be short-lived, citing longer-term prospects.
They noted Goldman Sachs on Tuesday raised its year-end target for Brent to $120 per barrel from $105, and its 2012 forecast to $140 from $120, saying it expects fuel demand growth will sap global supply and strain OPEC's spare oil output capacity. [ID:nL3E7GO153]
They also cited support from U.S. equities, which rose for a second day despite the day's disappointing data, helped by gains in technology shares. [.N]
"We are still viewing yesterday's advance (in oil futures) to two-week highs as a sufficient alteration to the chart picture to preclude the development of fresh lows any time soon," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. (Additional reporting by Robert Gibbons in New York; Simon Falush in London; and Francis Kan in Singapore; Editing by Marguerita Choy)