NEW YORK (Dow Jones)--Crude futures rose slightly Tuesday, though a stronger dollar and the next round of oil inventory data limited gains. Light, sweet crude for January delivery recently traded 30 cents, or 0.4%, higher at $69.81 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 1 cent lower at $71.88 a barrel. Futures have marked a tentative halt to losses after nine consecutive declines. But the factors that led to that slump--a strengthening dollar and high oil and fuel inventories--are still a presence. The dollar is now approaching a three-month high against the euro after strengthening from $1.4666 to $1.4522 to the euro on Tuesday, inflating the cost of dollar-denominated oil to holders of other currencies. Currency traders are expecting further support to come from the Federal Open Market Committee after the U.S. central bank's policy body concludes its meeting on Wednesday. The Fed's stimulus policies helped weaken the dollar this year, but a reversal could come if the economic recovery continues to pick up momentum. The dollar "should act again as a cap for oil," said Tom Bentz, a broker and analyst with BNP Paribas Commodity Futures Inc. "(Oil) can bounce at any time, but certainly the trend is still down, at least in the short term." In the long run, the trajectory for oil prices depends on how long the global surplus persists. The economic downturn weakened demand and funnelled unwanted oil and fuel into storage terminals and onto tankers offshore earlier in the year. Stockpiles have begun to fall from their summer peak, but forecasters expect uneven progress over the next year as major oil consuming economies, such as the U.S., slowly recover. Bank of America Merrill Lynch, for one, sees stockpiles not much below current levels by the middle of 2010, with supplies tightening only in the final months of next year. The most detailed public data, from the U.S. Energy Information Administration, also cover one of the worst local gluts, exaggerating the impact of inventory levels on prices. Stockpiles at Cushing, Okla., the delivery point for the Nymex futures contract, have soared in recent weeks to just short of the record high of 34.9 million barrels. Front-month oil futures have dropped in value relative to other months to cover the growing cost of storing more barrels at the increasingly crowded hub. Fresh government data are due out Wednesday, with the American Petroleum Institute, an industry group, scheduled to report its figures later Tuesday. "We could see an unexpected boost tomorrow if we draw down ... (at) Cushing, but we have to suffer through another day first," wrote Carl Larry, president of Oil Outlooks and Opinions. Analysts expect oil inventories to drop 2.1 million barrels in government data due out Wednesday, as end-of-year tax considerations create an incentive to reduce stockpiles by cutting imports. Gasoline stocks are seen rising 1.1 million barrels, and distillate inventories, including heating oil and diesel, are expected to drop 900,000 barrels, according to a Dow Jones survey. Refinery runs are expected to rise by 0.2 percentage point to 81.3% of capacity. Front-month January reformulated gasoline blendstock, or RBOB, recently traded 64 points, or 0.4%, higher at $1.8331 a gallon. January heating oil traded 13 points, or 0.1%, higher at $1.9095 a gallon. -By Brian Baskin, Dow Jones Newswires; 212-416-2453; brian.baskin@dowjones.com.

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