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NEW YORK - Oil prices remained depressed Friday amid a strengthening dollar and concerns over sustainable economic recovery.
New York's main contract, light sweet crude for December delivery, dropped 74 cents to end the week at 76.72 dollars after slumping by more than two dollars on Thursday.
London's Brent North Sea crude for January delivery lost 44 cents to 77.20 dollars.
Traders said oil investors tracked the global stock and foreign exchange markets as they weighed prospects for next week.
Shares continued to give up gains in Asia, Europe and the United States on corporate and economic recovery worries.
In Japan, investors were worried that a long bout of falling consumer prices could threaten the world's second largest economy's recovery from its worst recession in decades and eat into corporate profits and prompted consumers to put off purchases.
US economic data this week also did little to soothe recovery concerns, pulling down Wall Street shares.
Fresh data showed slightly hotter-than-expected reading of prices at the consumer level, a smaller-than-expected increase in industrial production, unexpected declines in both housing starts and building permits, and a jobless claims report that failed to drop below the 500,000 mark as some had hoped.
The oil market "followed the stock market and the dollar," said analyst Andy Lipow of Lipow Oil Associates.
The dollar, a safe haven currency, rallied Friday as investors shunned assets viewed as risky, such as the euro and stocks, on fresh concerns about the strength of global economic recovery.
A higher dollar makes greenback-denominated commodities such as crude oil more expensive for buyers using other currencies.
Supply concerns also dogged the market. Lipow particularly cited high distillate inventories in the United States, the world's largest energy consuming nation.
The US government weekly inventory data showed that stockpiles of distillates, which include diesel and heating fuel, fell 300,000 barrels in the previous week. Analysts had pencilled in a bigger drop of 500,000 barrels.
"In the near term, we have a huge oversupply, and the weather forecast for this winter has been changing towards either normal or warmer than normal type of season (and) if that happens, we will exit the winter with huge amount of distillate inventories and that would be bearish for the oil market," he said.
New York crude prices on Wednesday breached 80 dollars a barrel after data showed crude reserves in the United States fell 900,000 barrels in the week ending November 13.
Meanwhile, OPEC president Jose Maria Botelho de Vasconcelos has signalled that 75-80 dollar oil is an adequate level to allow for a global economic recovery.
The Organization of Petroleum Exporting Countries (OPEC) pumps about 40 percent of the world's oil.
- AFP /ls
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