UPDATE 4-Oil falls to around $80 on recovery concerns

                                
 * Nigerian rebels reinstate ceasefire in Niger Delta
                                
 * OPEC does not want to hurt economic recovery - president
                                
 * Dollar index weakens, limiting oil's decline

                                
 (Updates prices, adds quote paras 3-4)
                                
 By Alex Lawler
                                
 LONDON, Oct 26 (Reuters) - Oil fell for a third day to
around $80 a barrel on Monday, extending its retreat from last
week's one-year high, on renewed concerns about the strength of
the global economy.
                                
 Weak U.S. industrial sector earnings last week pushed down
stock markets and underscored concerns about the pace of the
U.S. economic recovery and its impact on energy demand.
                                
 "It's profit-taking after the surge in the past week without
any change in fundamentals," said Carsten Fritsch, analyst at
Commerzbank, of the price fall.
                                
 "There's more bearish factors than there is support from
financial markets," he said, adding that oil could quickly
resume its rally given more support from outside factors such as
equities.
                                
 U.S. crude for December delivery fell 32 cents to $80.18 by
1021 GMT, having earlier fallen as low as $79.57. It reached a
2009 high of $82.00 on Oct. 21. Brent crude <LCOc1> fell 17
cents to $78.75.
                                
 "The market is cautious about pushing oil prices higher
because the demand fundamentals are still weak and the world
economy is still fragile," said Ryuichi Sato, an analyst at
Mizuho Corporate Bank.
                                
 Adding to bearish sentiment, Nigeria's main militant group
reinstated a ceasefire on Sunday in the oil-producing Niger
Delta to allow for peace talks with the government.
[ID:nLP693003]
                                
 Attacks on oil installations by the Movement for the
Emancipation of the Niger Delta (MEND) have cut output in the
major oil exporter for the last three years.
                                
 The dollar weakened against a basket of currencies, offering
some support for oil <.DXY>. A Chinese report saying Beijing
should increase its holdings of euros and yen in its foreign
reserves knocked the U.S. currency.
                                
 China was again the bright spot for the global economic
outlook, following comments by Vice Premier Li Keqiang that the
country's economic recovery has consolidated after having
performed better than expected.
                                
 Its strong economic growth was reflected in a 12.5 percent
year on year jump in implied oil demand, the sixth rise in a row
and first double-digit growth since August 2006. [ID:nPEK284837]
                                
 The earnings season continues this week, offering more clues
about the strength of economic recovery.
                                
 Energy, telecom and consumer goods companies will be in the
spotlight with Exxon Mobil <XOM.N>, Chevron Corp <CVX.N>,
Verizon Communications <VX.N>  and Colgate-Palmolive <CL.N>
among the companies due to report.
                                
 The oil price rally has caused some concern within the 
Organization of the Petroleum Exporting Countries, prompting
some officials to raise the prospect of increasing its oil
output.
                                
 OPEC will lift supply to protect the global economic
recovery at a meeting in December if oil prices rise to $100,
Jose Botelho de Vasconcelos, the group's president, said on
Sunday. [ID:nLQ348267]
  (Additional reporting by Fayen Wong, Editing by William Hardy)