Oil falls nearly 3 pct on U.S. inventories, dollar

NEW YORK (Reuters) - Oil prices fell nearly 3 percent to below $77 a barrel on Thursday as the dollar firmed and growing U.S. crude inventories stirred demand concerns.

U.S. crude oil inventories rose 1.8 million barrels in the week to November 6, more than expected by analysts, as refinery utilization fell. <EIA/S> Refiners in the world's top oil consumer have throttled back production as weak demand hits margins.

Product inventories rose last week as U.S. demand continued to trail year-ago levels, according to a report by the Energy Information Administration, which was delayed a day by the U.S. Veteran's Day holiday on Wednesday.

U.S. crude futures settled down $2.34 at $76.94 a barrel. In London, Brent crude futures fell $1.93 to settle at $76.02 .

"Today's EIA data was moderately bearish, especially the build in gasoline with refinery utilization off," said Chris Jarvis, senior analyst for Caprock Risk Management in Hampton Falls, New Hampshire.

"More importantly, though, is the dollar and overhead resistance for the euro at current levels."

The U.S. dollar rallied broadly in technical trading after a weekly U.S. jobless report triggered strength in the currency and momentum pushed it further through key levels. <USA/>

Oil and the dollar tend to be inversely correlated because a weak dollar makes the commodity relatively cheap for non-dollar buyers.

The number of U.S. workers filing new claims for jobless benefits last week fell to the lowest level since January, the government said on Thursday, showing the hard-hit labor market may be slowly improving.

The oil price fall came despite an earlier report from the International Energy Agency showing that global oil demand will grow in the fourth quarter for the first time in more than a year.

Its forecast for 2010 demand at 86.2 million barrels per day was more bullish than two preceding surveys this week from the Organization of the Petroleum Exporting Countries and the EIA, a U.S. government agency.

(Reporting by Matthew Robinson, Robert Gibbons, Gene Ramos and Edward McAllister in New York; Emma Farge in London; Felicia Loo in Singapore; Editing by Walter Bagley)