UPDATE 7-Oil falls below $80; demand outlook uncertain

* Market shrugs off jump in U.S. equities

* U.S. distillate stocks still brimming

* Focus turns to U.S. jobs data due out on Friday (Recasts, updates prices, market activity to settlement)

By Edward McAllister

NEW YORK, Nov 5 (Reuters) - Oil fell nearly 1 percent to below $80 a barrel on Thursday, as doubts about a recovery in oil demand outweighed positive economic signals.

U.S. crude for December lost 78 cents to settle at $79.62. London Brent crude CLc1 fell 90 cents to settle at $77.99

"Economic indicators continue to show an economy on the mend, but we are not seeing any real signs of that in energy demand," said Peter Beutel, president at Cameron Hanover in New Canaan, Connecticut.

The number of U.S. workers filing new claims for jobless insurance fell more than expected last week to a 10-month low, the Labor Department said, with continuing claims dropping to the lowest since March. [ID:nN05106320]

U.S. non-farm productivity in the third quarter rose at its fastest pace in six years, government data showed on Thursday. [ID:nN05106320]