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GLOBAL MARKETS-Oil jumps on drop in U.S. rig count; dollar up 5 pct for month
* U.S. oil surges 8 pct on drop in oil rig count
* U.S. stocks lower; MSCI (NYSE: MSCI - news) world index also down
* Russian central bank unexpectedly cuts rates
* Fourth-quarter U.S. GDP growth slows to 2.6 percent pace (Updates with crude oil settlements)
By Caroline Valetkevitch
NEW YORK, Jan 30 (Reuters) - Oil prices surged on Friday following the sharpest weekly drop in U.S. oil rig count in nearly 30 years, while the dollar index was on track to end January with gains of about 5 percent.
U.S. stocks cut losses as energy shares followed oil prices higher. U.S. crude rose 8.3 percent to settle at $48.24 a barrel, while Brent crude jumped 7.9 percent to settle at $52.99. The S&P 500 energy was up 0.8 percent.
European stocks ended lower, but registered their biggest monthly gain in three years, while major U.S. stock indexes were on track for a second straight monthly decline.
The dollar index, bolstered by expectations the U.S. Federal Reserve will be the first major central bank to raise interest rates, also was poised to end January with its longest run of gains since the greenback was floated in 1971. It was up 0.02 percent on Friday.
Weighing on stocks, U.S. gross domestic product expanded at a 2.6 percent annual pace after the third quarter's spectacular 5 percent rate, the Commerce Department said in its first snapshot of fourth-quarter GDP.
The headline number was "well below consensus expectations and that is definitely one of the data points that many bulls were looking for to justify staying bullish," said Peter Kenny, chief market strategist at Clearpool Group in New York.
The Dow Jones industrial average fell 111.68 points, or 0.64 percent, to 17,305.17, the S&P 500 lost 11.44 points, or 0.57 percent, to 2,009.81 and the Nasdaq Composite dropped 14.64 points, or 0.31 percent, to 4,668.77.
Adding to concerns for stock investors, Greece's finance minister said the government would not cooperate with the European Union and International Monetary Fund mission bankrolling the country and would not seek an extension to the bailout program.
The FTSEurofirst 300 index of top European shares ended down 0.6 percent, but rose 7.2 percent in January, its biggest monthly gain in three years.
The MSCI all-country world index declined 0.6 percent.
European shares have been lifted recently by expectations that a bond-buying program by the European Central Bank will help the region's economic recovery. U.S. stocks have been hit by falling oil prices and concern about weak overseas demand.
U.S. Treasury debt prices jumped, with long-term yields hitting record lows after the slower-than-anticipated economic growth, which encouraged speculation the Fed will delay interest rate hikes.
Friday's gains added to a strong Treasuries rally that has the 30-year Treasury on track for total returns in January of more than 10 percent.
Russia surprised markets by cutting interest rates as fears of a Russian recession mount following a plunge in global oil prices and Western sanctions over the Ukraine crisis.
The move pressured the rouble, which skidded as much as 4 percent against the dollar, and bolstered expectations that Turkey will cut rates again next week, sending the lira to a new record low. (Additional reporting by Rodrigo Campos in New York; Editing by Janet Lawrence, Susan Fenton, Meredith Mazzilli, and Chizu Nomiyama)
