London (Platts)--20Nov2009/718 am EST/1218 GMT

Global crude futures were trading lower Friday morning as a stronger dollar coupled with excess supply brought downward pressure on the crude complex, market sources said.

At 11:49 GMT, the front-month ICE Brent contract was $0.25 lower, at $77.39/barrel.

The NYMEX WTI January contract was also lower at $77.72/b, shedding $0.33 from Thursday's settle. The December contract expires Friday.

The ICE Dollar index rebounded trading at 75.555 points, a 0.262 rise. "There is an overhang in the market," one trading source said. "It can be seen by the [ICE] gasoil and Brent spreads."

"There is a fair amount of oil with no home and demand is sluggish," he said.

The ICE Brent spread hovered around minus $0.80/b Friday morning, having traced a downward trend since mid-September.

The WTI/Brent arbitrage continued to narrow valued $0.08/b lower on the day at $0.33/b.

"There is so much crude in the US and no-one wants it," an industry source said.

Although fundamentals were cited as contributing factors to weaker prices Friday, crude futures continued to be viewed as a "dollar trade" while the inverse relationship between the two instruments persisted.

"Thursday's selloff again illustrated the inability of oil prices to break out of their rather tight trading range between $75-$82," Edward Meir of MF Global said. "Capping the upside, has been the potent combination of comfortable oil inventories and poor demand, while supporting the bottom end, has been the persistent weakness in the US dollar."

--Elzbieta Rabalska, elzbieta_rabalska@platts.com