LONDON (Dow Jones)--Oil futures on Tuesday recouped losses incurred during the last trade session, as the dollar relinquished Monday's strength and European equities traded in positive territory. Nymex light, sweet crude climbed back to $70 a barrel after losing 3% of its value Monday, however weak oil demand and excess supply continue to weight on market sentiment, analysts said. "It looks like the oil market wants a correction, but firmer equity markets and a sliding USD is not allowing it," said Mark Pervan, head of commodity research at Australia and New Zealand Banking Group. Market participants expect oil prices to move sideways, as they await the release of key U.S. inventory data and a Federal Reserve interest rate decision Wednesday for clues on oil demand and economic recovery in the world's largest oil consumer. At 1140 GMT, the front-month November Brent contract on London's ICE futures exchange was 93 cents higher at $69.62/bbl. The front-month October contract on the New York Mercantile Exchange was trading 94 cents up at $70.65/bbl. The ICE's gasoil contract for October delivery was $5.50 higher at $564.75 a metric ton, while Nymex gasoline for October delivery was up 250 points at 177.64 cents a gallon. Inventory figures due for release by the American Petroleum Institute at 2030 GMT Tuesday will attract market participants' attention for clues on what data from the U.S. Department of Energy will reveal Wednesday. However, given the large difference between the two reports last week, with API reporting stocks much higher, the numbers will have to be adjusted for an accurate estimate of DOE figures, Olivier Jakob, managing director of Swiss consultancy Petromatrix, said. "If the API reports large draws tonight, this is not necessarily bullish as it would then adjust to the DOE," he said. "If there are no large draws in the API, then this would be a bearish flag as it would mean the DOE has strong upwards revisions to make on stocks." According to an average of nine analysts interviewed by Dow Jones Newswires, DOE inventory data, due at 1430 GMT Wednesday, are expected to show crude stocks fell by 1.4 million bbl for the week ended Sept. 18. Gasoline inventories are forecast to have risen by 400,000 bbl, while distillate stocks are expected to have climbed by 1.6 million bbl. Meanwhile, traders will also take note of the interest rate decision by the Federal Reserve Wednesday for signals that the U.S. Central Bank is satisfied with the rate of economic recovery in the country, said Peter Beutel, president of trading advisory firm Cameron Hanover. With the approach of the winter heating season, the supply picture in the oil complex is expected to reassert itself as a key influence on oil prices, Pervan said. "This matters, as the oil markets enter a transitional period ??? leaving the U.S. summer driving season and into the winter heating oil season," he added, noting that domestic distillate stocks in the U.S are currently at all-time highs.

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