By Paul Burkhardt Oct. 22 (Bloomberg) -- Crude oil fell from a one-year high as the dollar rose, diminishing the appeal of commodities to investors, and after a government report showed that more Americans than forecast filed unemployment claims. Oil dropped as much as 1.8 percent as the U.S. currency advanced from the lowest level in almost 14 months. A rising dollar dims investor demand for commodities as a hedge against inflation. Initial jobless applications rose by 11,000 to 531,000 in the week ended Oct. 17, the Labor Department said today in Washington. “People are still keen on the dollar and we’re going to see prices move on that,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. Crude oil for December delivery fell 54 cents, or 0.7 percent, to $80.83 a barrel at 10:35 a.m. on the New York Mercantile Exchange. Futures touched $82 yesterday, the highest since Oct. 14, 2008. Prices are up 81 percent this year. The dollar strengthened to $1.4969 per euro from $1.5016 yesterday, when it touched $1.5046, the weakest level since August 2008. “You had a pretty good surge yesterday and at these price levels people might want to take some money out,” said Michael Fitzpatrick, vice president of energy with MF Global in New York. “The dollar is going to remain weak, I think we’re going to keep forging ahead.” Brent crude oil for December settlement declined 31 cents, or 0.4 percent, to $79.38 a barrel on the London-based ICE Futures Europe exchange. Iran Talks Iran said yesterday it is ready to consider accepting enriched uranium from Russia for a research reactor, improving prospects for broader talks aimed at allaying Western concern that the Persian Gulf country seeks an atomic bomb. Progress in diplomatic negotiations with Iran could mollify geopolitical security concerns and weaken crude oil prices. “I think it might drift down a little because of a possible agreement with Iran on the nuclear,” said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Massachusetts. The U.S. has accused Iran of uranium enrichment to develop nuclear weapons, while the Persian Gulf nation has said its program is intended for electricity production. The country is the second-biggest producer in the Organization of Petroleum Exporting Countries. OPEC OPEC may decide to increase production at its meeting in December, the group’s secretary-general, Abdalla El-Badri, said today in London. An increase will depend on prices remaining at $75 to $80 a barrel, as well as on stockpiles returning to the five-year average and the elimination of floating storage, El- Badri told reporters. “We are in a very comfortable zone at this time,” El- Badri said. “If this price will continue, if we see stocks go back to the normal level, if we see there is a real economic growth, then I’m sure our member countries will increase the production.” The 12-member group will meet on Dec. 22 in Luanda, Angola, to review output targets. “If they do decide to lift their levels it could be a cap on prices,” McGillian said.

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