* 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
(Updates with settlement prices, paragraphs 3-5)
By Matthew Robinson
NEW YORK, Oct 20 (Reuters) - Oil prices fell on Tuesday,
after hitting a one-year high above $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. []
[]
U.S. crude <CLc1> for November delivery, which expired on
Tuesday, fell 52 cents to settle at $79.09 a barrel after
rising as high as $80.05, its highest since Oct. 14 last year.
Traders said the weak U.S. data spurred profit taking ahead
of the November contract's expiry, snapping eight days of gains
for crude.
London Brent crude <LCOc1> fell 53 cents to $77.24 a
barrel.
Crude prices have surged nearly $10 in October as strong
corporate earnings have fueled optimism about an economic
recovery.
Oil traders have looked to equities and economic data for
signs of a turnaround that could boost fuel demand.
U.S. stocks fell Tuesday as the lackluster housing data
outweighed positive results from bellwether companies such as
Apple and Caterpillar. []
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.
[]
"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, an 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:
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.
[]
"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 volatile prices for
the sake of the 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. [] []
The oil market was also awaiting direction from the U.S.
inventory due later Tuesday from the American Petroleum
Institute, and from the U.S. Energy Information Administration
on Wednesday.
An updated Reuters poll of analysts forecast the data will
show a build in crude stocks of 1.8 million barrels last week,
a drop of 1.3 million barrels in distillate inventories, and a
decline of 1 million barrels in gasoline stockpiles. []
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. []
(Additional reporting by Gene Ramos and Robert Gibbons in New
York and Emma Farge in London; Editing by David Gregorio)
