U.S. crude oil futures fell 74 cents to $76.59 a barrel by 0943 GMT, after briefly touching $76.32. Brent crude lost 82 cents to $75.45 a barrel.
We were impressed by the rather abrupt turnaround in the dollar over the last 24 hours, and as a result, could see many commodities under pressure for the balance of the week if the dollar builds on these gains, MF Global said in a research note.
A stronger U.S. dollar typically pressures oil prices as it reduces the purchasing power of other currencies, discouraging non-U.S. investor interest in dollar-denominated commodities.
The dollar rose against the euro, nearing a nine-month high hit earlier in February. It struck a seven-month high against a basket of currencies on Thursday.
The single currency has been hounded by the sovereign debt problems of Greece and a weak eurozone growth outlook.
That contrasts with the views of several U.S. Federal Reserve policymakers. Minutes of the Fed's January meeting suggest officials still have a relatively positive outlook for the United States, the world's largest economy.
Gold and copper fell. Gold was also pressured by the International Monetary Fund's plans to sell more gold in the market.
Later, the market focus will shift to official oil figures and macro economic data, including weekly U.S. jobless claims at 1330 GMT.
Analysts in a Reuters poll expected the figures from the Energy Information Administration (EIA) to show an increase of 2.2 million barrels in U.S. crude oil inventories in the week to February 12. They forecast an increase in gasoline inventories and a drop in middle distillates stocks, including heating oil.
The figures will be released at 1600 GMT on Thursday, a one-day delay from the normal Wednesday release due to a U.S. public holiday.
As a precursor to the official data, industry group American Petroleum Institute said on Tuesday crude inventories dropped by 63,000 barrels last week.
But stocks of heating oil and diesel rose 1.3 million barrels despite the cold weather in the northeast of the country.