Oil dips near $76

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NEW YORK (CNNMoney.com) -- Oil prices fell Friday, extending losses from the previous session, amid concerns about weak energy demand and record-high U.S. inventory levels.

Oil for December delivery was down 59 cents and settled at $76.35 a barrel. On Thursday, crude fell 3% to settle at its lowest level in nearly one month.

The retreat came one day after government figures showed a larger-than-expected increase in the nation's stockpiles of crude oil. Supplies of gasoline and distillates also rose.

"Yesterday's report is still casting a long shadow," said Peter Beutel, an oil market analyst at Cameron Hanover. "The supply and demand factors for oil are very poor."

Oil prices have risen from a low of about $34 last December as the global economy has shown signs of improvement, raising bets that the world's thirst for energy will rebound.

However, the market has struggled to rise above this year's high near $82 a barrel, as U.S. inventories of crude oil and gasoline remain at record highs.

Oil prices were also pressured by a slightly stronger dollar, which makes commodities priced in U.S. currency more expensive for buyers in other currencies.

The dollar index (DXY), which measures the greenback's value against a basket of currencies, was up 0.1% to 75.53. Despite the modest gain, the index remains near a 15-month low and analysts expect the greenback to depreciate further into next year.

But with the dollar firmer on Friday, the market has turned its focus to the bleak supply and demand outlook for crude oil, Beutel said.

"The dollar has to come under more selling pressure for the bulls to return to this market," he said.