(Corrects paragraph 7 to drop dollar symbol before index levels)
TOKYO, Jan 30 (Reuters) - U.S. oil slipped on Tuesday, extending losses into a second session, as a strengthening dollar sapped demand for crude, while rising U.S. output helped dampen prices.
U.S. West Texas Intermediate crude futures were 13 cents, or 0.2 percent, lower at $65.43 at 0027 GMT. On Monday, they fell 58 cents, or 0.9 percent, to $65.56 a barrel.
Brent crude futures, the global benchmark, were yet to trade. The contract for March delivery settled down $1.06, or 1.5 percent, at $69.46 a barrel on Monday.
Prices are still heading for a fifth straight monthly gain.
The rally in oil prices had recently been fuelled by the U.S. dollar’s six straight weekly slides. The greenback is down 3 percent so far this month.
Oil is priced in the U.S. currency, so a falling dollar can boost demand for crude from buyers using other currencies.
The dollar index had been below 90 since Jan. 24, falling below 89 on Friday. But the currency has rebounded since then to around 89.37, which has weighed on crude prices.
Investors are bracing “for the upcoming refinery maintenance season amid a strong USD,” ANZ Research said in a note, which also pointed to rising inventories as U.S. shale producers continue their battle with OPEC.
U.S. production is already on par with Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries. Only Russia produces more, averaging 10.98 million bpd in 2017. (Reporting by Aaron Sheldrick; Editing by Subhranshu Sahu)