UPDATE 7-Oil falls, U.S. jobless data outweighs stock drop

                                
 * Surprise draw in U.S. crude stocks keeps crude up
                                
 * OPEC, as expected, keeps oil output targets intact
                                
 * Dollar <.DXY> hits 2010 low against currency basket
                                
 * Coming up: U.S. Sept consumer prices Friday
 (Recasts, updates prices and market activity, changes byline
and moves dateline from LONDON)
                                
 By Gene Ramos
                                
 NEW YORK, Oct 14 (Reuters) - Oil prices fell below $83 a
barrel on Thursday as weak U.S. jobless claims data outweighed
a drawdown in U.S. crude and petroleum product inventories.
                                
 U.S. government data showed a surprise, slight drawdown in
U.S. crude stockpiles last week that went against forecasts for
an increase. [EIA/S]
                                
 Traders said the market was pausing after a hefty gain on
Wednesday and looking for more concrete indicators of how the
U.S. economy is faring. Data released early Thursday showed
that new claims for jobless benefits unexpectedly rose last
week, weighing on crude prices. [ID:nN14277059]
                                
 At 1:09 p.m. EDT (1709 GMT), U.S. crude for November
delivery <CLc1> dipped 44 cents to $82.57 a barrel, after
hitting $84.12 early. In London, ICE November Brent crude
<LCOc1> dropped 53 cents to $84.11, after an early $85.46
high.
                                
  For oil investors, the jobs data signaled weak oil demand
going forward. But the report strengthened speculation that the
U.S. Federal Reserve will launch new monetary easing policies
that would boost growth prospects and cut unemployment.
                                
 "The market is on a wait-and-see attitude here, waiting for
more substantive economic indicators to see how the economy is
faring before making any further moves," said Tom Knight, a
trader at Truman Arnold, a petroleum marketing company in
Texarkana, Texas.
                                
 The oil market was also awaiting Friday's U.S. government
data on consumer prices last month, car and truck sales, and a
preliminary reading of consumer sentiment so far this month.
                                
 Also on tap on Friday is a speech by Fed Charman Ben
Bernanke in Boston that could provide clues on what monetary
authorities are planning to do next.
                                
 CRUDE, PRODUCT STOCKPILES DOWN
                                
 U.S. crude inventories dipped by 416,000 barrels last week,
the U.S. Energy Information Administration said, far below the
4.1-million-barrel drawdown reported by the American Petroleum
Institute on Tuesday, but against the forecast in a Reuters
poll for a 1.1-million-barrel increase. [EIA/S]
                                
 Gasoline stocks fell by 1.8 million barrels, more than
expected, while distillate supplies, which include heating oil
and diesel, dropped by 255,000 barrels, less than forecast.
                                
 (Graphic of weekly inventories:
http://link.reuters.com/vej58p)
                                
 Oil prices got early support from the U.S. dollar's fall to
its lowest level this year against a basket of currencies.
<.DXY> while the euro rose to an eight-month high. [USD/]
                                
 A weak dollar usually lifts oil prices as it makes
dollar-denominated crude less expensive for buyers using other
currencies, lowering the value of greenbacks paid to producers
and attracting investors looking to shift from cash to
commodities.
                                
 OPEC DECISION
                                
 Ministers from the Organization of the Petroleum Exporting
Countries decided in Vienna to keep oil production unchanged,
maintaining a supply policy that has served it well for nearly
two years. [ID:nLDE6951TE]
                                
 The decision meant that OPEC is happy with oil prices as
they are and wants to do nothing to disrupt the supply-demand
balance in the market.
                                
 Ecuador, which holds OPEC's rotating presidency, confirmed
the cartel had settled on no change in output and said the
group's next conference would be held in Quito on Dec. 11.
                                
 "The biggest challenge we have is to keep the oil market as
it is today," Saudi Arabian Oil Minister Ali al-Naimi said.
                                
 Oil prices did not react to the widely expected OPEC deal.
                                
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 Graphic of asset returns since Bernanke said in August the
Fed was ready to take more steps to boost U.S. economy:
                                
          http://link.reuters.com/kyw48p
                                
 Graphic of oil versus gold and copper prices:
                                
          http://link.reuters.com/nun58p
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 Improving fundamentals in the oil market, including falling
inventories in the United States, rebounding OECD demand and
soaring imports in China, are also encouraging buying of crude
oil ahead of the Northern Hemisphere winter heating season.
 (Additional reporting by Robert Gibbons in New York,
Christopher Johnson and Emma Farge in London, and Alejandro
Barbajosa in Singapore; Editing by Walter Bagley)