By Emma Farge LONDON (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 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 toward $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.

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