By Claire Rangel Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Crude futures fell Monday after the dollar rose to its highest level against the euro in a month. Light, sweet crude for January delivery recently traded 77 cents, or 1%, lower at $74.70 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 60 cents, or 0.8%, lower at $76.92 a barrel. Oil continued to maintain its inverse relationship with the dollar, as the greenback strengthened against a basket of other currencies. It was most recently trading at $1.4793 against the euro, up from an intraday low $1.4906. The dollar is still strengthening on Friday's report that the U.S. unemployment rate slipped from 10.2% to 10% in November, raising the spectre that the U.S. will raise interest rates sooner than expected. Investors have again become averse to riskier assets, that include oil, and are investing in the lower yielding but safer investment of the dollar. "As far as this week goes, a resurgent dollar will spell further weakness for crude, doubly so if gold gives up its spectacular gains," said Stephen Schork, editor of energy newsletter The Schork Report. Analysts expect oil to take much of its influence this week from the direction of the dollar and equity markets, ahead of the weekly U.S. inventory data reports. But they cautioned that the global financial markets may have reacted too sharply and quickly to last week's jobs figures. "Yes, the economy is getting better, but we can't read too much into one monthly report," said Phil Flynn, PFGBest in Chicago. He noted that as the economy recovers, we may not see oil demand come back as quickly. Oil consumption in the U.S. is still struggling to revive and while the unemployment rate has fallen, it is still at historically high levels. Oil consumption, particularly gasoline, is dependent on consumer spending, which is restricted in times of high unemployment and recessionary environments. The spread, or price differential, between the January and February Nymex contracts has again increased, most recently trading at a $1.85 discount, the widest level since Aug 18. This represents current concerns in the market over the high stock levels in the U.S. Oil prices have been trending downwards in recent weeks due to this pressure on the front-month contract, and a lack of conviction that an upturn in oil demand in the near-term will trims these inventories. Oil market participants will be focusing on whether oil will stay below the $75 a barrel level, the bottom end of the recent trading range, with a close below this confirming the recent pullback and negative trend, said analysts. However, Flynn noted that if oil fails to close below this level, "we may see prices rebound a bit." Front-month January reformulated gasoline blendstock, or RBOB, recently traded 2.41 cents lower at $1.9509 a gallon. January heating oil recently traded 1.44 cents, or 0.8%, lower at $2.0124 a gallon. -By Claire Rangel, Dow Jones Newswires; 212-416-2846; claire.rangel@dowjones.com.

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