LONDON (AFP) - Oil prices fell on Friday, although New York crude managed to hold above 78 dollars, as the US currency strengthened at the end of a volatile week for markets. New Yorks main futures contract, light sweet crude for delivery in March, fell 99 cents to 78.07 dollars a barrel. Brent North Sea crude for April delivery dropped 1.08 dollars to 76.70 dollars. The dollar rose to fresh nine-month highs against the euro on Friday after a surprise change to the US Federal Reserves monetary policy, traders said. The European single currency fell to 1.3443 dollars overnight striking the lowest level since May 18. A stronger dollar makes dollar-priced oil more expensive for buyers using weaker currencies, hitting demand. The Feds move sparked speculation that a rise in the main Fed funds rate might be closer than previously thought, boosting the dollar on hopes of an increase in yields on US financial assets. At the same time, hopes of a rebound in oil demand were dampened, but oil price losses seem contained, the more so as the inventory data published by the US Department of Energy (DoE) yesterday did not provide much cause for optimism, said Commerzbank analyst Carsten Fritsch. US crude oil stockpiles rose by nearly 3.1 million barrels to 334.5 million barrels for the week ended February 12, compared with average forecasts for a 1.8-million increase. Gasoline (petrol) stocks rose by 1.6 million barrels to 232.1 million barrels, while analysts polled by Dow Jones Newswires had forecast a 1.5-million increase. Distillate stocks, including heating oil and diesel fuel, dropped by 2.9 million barrels to 153.3 million barrels. Northern parts of the United States experienced extremely cold weather conditions last week which pushed up demand for heating fuel. The DoE weekly data is closely followed since the United States is the worlds biggest energy consuming nation. Traders have this week also been keeping watch on oil-rich Iran, where renewed tensions over Tehrans nuclear ambitions helped to support crude prices. Iran recently began enriching uranium to 20 percent purity, which the United States and several other powers said added to evidence that the Islamic republic is seeking to build a nuclear weapon. Tehran counters that its only goal is peaceful nuclear energy and research. US Secretary of State Hillary Clinton said her country had no plan for military action against Iran, while Admiral Mike Mullen, the chairman of the US Joint Chiefs of Staff, said Washington has not ruled out military action. During a roller-coaster weeks trading, oil prices shot up 3.0 dollars on Tuesday as the euro rallied against the dollar that day.