* Weekly U.S. EIA data shows 1.8 mln barrel crude build
* Dollar ticks up from 15-month lows after U.S. jobs data
* IEA shows global fuel demand to grow in Q4
(Adds EIA data, updates prices)
By Emma Farge
LONDON, Nov 12 (Reuters) - Oil fell more than $2 to around
$77 a barrel on Thursday as a sharp hike in U.S. crude stocks
and a stronger dollar outweighed an IEA report that said global
oil demand will return to growth this quarter.
Delayed weekly inventories data out of the world's largest
fuel consumer the United States showed a bigger-than-expected
1.8 million barrel rise in crude stocks. []
Oil product stocks also surged across-the-board with
gasoline jumping a hefty 2.5 million barrels.
U.S. crude futures fell $2.38 to $76.90 a barrel by 1628
GMT, in a week where prices have peeped over $80 every day bar
Thursday.
Brent crude futures <LCOc1> fell $2.08 to $75.87 a barrel.
"This market really has got ahead of itself price-wise, in
terms of supply and demand," said Optionsxpress analyst Mike
Zarembski after the data.
A fall in U.S. jobless claims helped boost the dollar from
15-month lows and this also weighed on oil prices.
[]
The price drop came despite an earlier report from the
International Energy Agency (IEA) showing that global oil demand
will grow in the fourth quarter for the first time in over a
year. [] []
Its forecast for 2010 demand at 86.2 million barrels per day
is more bullish than two preceding surveys this week from OPEC
and U.S. government agency the Energy Information
Administration. [] []
HIGH STOCKS
But analysts said that traders have already factored in the
more positive demand picture and that this expectation helped
crude rally towards $80 a barrel in recent weeks.
"Most market participants have already played the game based
on a pretty strong demand recovery and it's not that
surprising," said Andy Sommer, senior oil analyst with EGL
Group.
He added that even in an environment of more robust fuel
demand, it will still take a long time to clear swollen stocks
of oil and oil products stored on land and in floating vessels.
"The overall inventories picture is still bearish," he said.
The IEA estimated that the volumes of oil products in
floating storage, mainly heating oil, was over 80 million
barrels.
Analysts said that the dollar, still near 15-month lows
against a basket of currencies, was a key factor determining
future oil prices. []
Oil and the dollar tend to be inversely correlated because a
weak dollar makes the commodity relatively cheap for non-dollar
buyers.
Expectations that U.S. interest rates will remain near zero
for the foreseeable future has increased the appeal of
higher-yielding assets such as oil and gold.
Gold prices hit record highs above $1,122 an ounce on
Thursday. []
(Additional reporting by Felicia Loo in Singapore; Editing
by Keiron Henderson)
