Crude-oil futures fell in Asian trading Thursday following a bearish U.S. oil inventory report overnight and a stronger U.S. dollar. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at $88.67 a barrel at 0651 GMT, down $0.30 in the Globex electronic session. September Brent crude on London's ICE Futures exchange fell $0.27 to $104.11 a barrel. Buying interest was thin as the dollar rose against other major currencies such as the yen and the euro, making dollar-priced crude oil more expensive to investors holding other currencies. At 0600 GMT, the ICE Dollar Index was at 83.745 compared with 83.641 overnight. Sentiment took a hit after the Energy Information Administration reported an unexpected build in U.S. petroleum stockpiles. The EIA said stocks jumped by 2.7 million barrels last week compared with expectations of an 800,000-barrel draw. "Overall, the data appeared bearish enough to increase the market's sensitivity to any renewed weakening out of the euro zone or global equity markets," Jim Ritterbusch of Ritterbusch and Associates said. Oil prices have been sensitive to euro-zone woes as well as the health of global economy, amid signs of slowing momentum in China, which has helped drag prices lower this year. Crude was under more pressure after the U.K. reported overnight that its economy shrunk by 0.7% in the second quarter, the biggest quarterly contraction since the first quarter of 2009. But analysts said that amid continued bearish news on the economic front, investors seem to have discounted supply-side risks related to Iran that have a large bearing on the delicately-balanced oil market. "...upward momentum has been capped by the resurgence of sovereign debt fears. However, with little to no geopolitical risk currently priced in, we expect a further upward drift in prices," Barclays Capital analysts said in a note. Nymex reformulated gasoline blendstock for August--the benchmark gasoline contract--rose 7 points to $2.7936 a gallon, while August heating oil traded at $2.8384, 56 points lower. ICE gasoil for August changed hands at $896.25 a metric ton, up $9.50 from Wednesday's settlement. Write to Gurdeep Singh at gurdeep.singh@dowjones.com

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