UPDATE 1-Oil falls on stronger dollar, U.S. supply jump

                                
 * U.S. crude stocks jumped 6.4 million barrels last week
-API
                                
 * Technicals show $84.50 target intact [ID:nSGE69Q00O]
                                
 * Coming Up: U.S. EIA petroleum inventories; 1430 GMT
  (Adds IEA official comments on global refining capacity)
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, Oct 27 (Reuters) - Oil fell on Wednesday as the
dollar strengthened and after an industry report showed a
bigger-than-expected gain in U.S. crude inventories last week.
                                
 U.S. crude for December <CLc1> fell 40 cents to $82.15 a
barrel at 0620 GMT, more than $2 from a five-month high of
$84.43 reached on Oct. 7. ICE Brent <LCOc1> fell 40 cents to
$83.26.
                                
 The link between the dollar and the price of oil remained
near its strongest in 14 months amid speculation that the
Federal Reserve will inject money into the U.S. economy.
                                
 But the greenback rose 0.18 percent against a basket of
currencies on Wednesday <.DXY> after the Wall Street Journal
reported the Fed will unveil a programme of U.S. Treasury bond
purchases worth a few hundred billion dollars over several
months, compared with investors' base-case scenario of an
initial commitment to buy at least $500 billion in debt over
five months.
                                
 "The dollar is clearly a major driver of oil prices at
present, and our prediction that this would be the case is now
being confirmed by the increased correlations evident in the
market," JP Morgan analysts headed by Lawrence Eagles said.
                                
 Consumer confidence in the U.S. rose slightly in October
but remained near historically low levels as concerns about the
labor market persisted, a report showed on Tuesday, reinforcing
the view the Fed will act when it meets next week.
[ID:nN26127639]
                                
 U.S. crude inventories jumped by 6.4 million barrels in the
week to Oct. 22, the American Petroleum Institute reported on
Tuesday, more than six times the forecast gain of 1.1 million
in a Reuters poll and despite an increase in refinery
utilisation.
                                
 Distillate inventory statistics were also bearish, showing
an increase of 818,000 barrels, compared to expectations for a
drop of 1.5 million barrels. But gasoline posted a surprise
decline of 1.8 million barrels, compared to a projected 200,000
barrel gain.
                                
 Government statistics on U.S. inventories and demand from
the Energy Information Administration will follow on Wednesday
at 1430 GMT.
                                
 The dollar rose on Wednesday on doubts the Fed will buy
assets as aggressively as expected to pump more money into the
system, while commodity stocks led Asian stocks lower.
[MKTS/GLOB]
                                
 The global economic recovery could derail if commodity
prices rise further after the Fed's move on further
quantitative easing, an official with the International Energy
Agency (IEA) said on Wednesday. [ID:nSGE69Q0AL]
                                
 The global rate of refinery utilisation is seen falling to
an average of 78 percent by 2015 versus 84 percent in 2008,
said Eduardo Lopez, IEA's senior oil demand analyst.
                                
 Oil refinery strikes in protest against French President
Nicolas Sarkozy's unpopular pension reform eased on Tuesday,
with walkouts ending at several plants and unions sounding more
open to talks with employers. [ID:nLDE69P0OO]
                                
 Cayo Arcas, Mexico's main oil exporting port in the Gulf,
reopened on Tuesday afternoon as the wake of Hurrican Richard
dissipated. The port was briefly shut in the morning after the
storm passed through the Bay of Campeche. [ID:nMEX003877]
 (Editing by Manash Goswami)