UPDATE 5-Oil falls from 1-yr high over $80, US data weighs

                                
 * U.S. Energy Secretary "nervous" about $80 oil
                                
 * OPEC Secretary-General says prices at $80 "a bit high"
                                
 * U.S. crude inventories expected to rise
 (Recasts, updates prices, market activity; new byline,
dateline, previously LONDON)
                                
 By Matthew Robinson
                                
 NEW YORK, Oct 20 (Reuters) - Oil fell on Tuesday after
hitting a one-year high over $80 a barrel, as disappointing
U.S. data on housing starts and inflation weighed on markets.
                                
 New construction of U.S. homes rose less than expected in
September, while U.S. producer prices declined unexpectedly,
largely due to a drop in energy prices. [ID:nN20420176]
[ID:nN20421137]
                                
 U.S. crude for November delivery <CLc1> fell $1.45 to
$78.16 a barrel at 12:34 p.m EDT (1634 GMT), after rising to
$80.05 a barrel earlier, its highest since Oct. 14 last year.
                                
 Traders said the weak U.S. data spurred profit taking ahead
of the November contract's expiry later on Tuesday.
                                
 London Brent crude <LCOc1> fell $1.23 to $76.54 a barrel.
                                
 Oil prices have surged nearly $10 in October, as strong
company results fueled optimism that a strong corporate
earnings season will signal economic recovery.
                                
 Oil traders have looked to equities and macroeconomic data
for signs of a turnaround that could boost fuel demand.
                                
 U.S. stocks fell as the lackluster housing data outweighed
positive results from bellwether companies such as Apple and
Caterpillar. [.N]
                                
 The dollar rebounded from a 14-month low against a basket
of major currencies, with the euro falling below $1.49 after
failing to breach options-related barriers around $1.50.
[USD/]
                                
 "The dollar strengthening coupled with the stock market
slide pulled crude lower after it hit $80. And there may be
profit taking after eight straight sessions higher," said Dan
Flynn, analyst at PFGBest Research in Chicago.
                                
 Analysts said that if prices again surpass $80 a barrel,
the rally could gather momentum because of a high density of
call options -- a contract that gives traders the option of
buying crude at a set price -- at around this level.
                                
 For a graphic showing options see below.
                                
 http://graphics.thomsonreuters.com/109/CMD_OLOPT1009.gif
                                
 PRICE CONCERN
                                
 U.S. Energy Secretary Steven Chu expressed concern about
rising oil prices possibly hurting an economic rebound.
[ID:nN20438413]
                                
 "Even $80 is making me nervous," he told the Reuters
Washington Summit, adding the government of the world's top
fuel consumer would prefer stable prices to volatilie prices
for the sake of economy.
                                
 OPEC Secretary-General Abdullah al-Badri said oil prices at
$80 a barrel were "a bit high," but they had helped the group
revive major upstream investment projects to create a larger
supply cushion. [ID:nCOM000210] [ID:nLK338542]
                                
 The market was also awaiting direction from the U.S.
inventory due out later Tuesdy from the American Petroleum
Institute, and from the U.S. Energy Information Administration
on Wednesday.
                                
 A preliminary Reuters poll of analysts forecast the data
will show a 2 million barrel build in crude stocks last week.
[EIA/S]
                                
 U.S. distillate stocks, which include heating oil, are near
26-year highs and are expected to be ample even if forecasts
for below-normal temperatures materialize in the United States
this winter. [ID:nN19393522]
 (Reporting by Matthew Robinson, Gene Ramos, and Robert Gibbons
in New York City; Emma Farge in London; Editing by David
Gregorio)