NEW YORK (MarketWatch) -- Crude-oil futures rallied more than 2% Tuesday, recovering some ground after sustaining a steep fall in the previous session, as pressure on the dollar as well as expectations for a further drop in U.S. crude inventories boosted sentiment. Updated data on petroleum inventories will show stores of crude fell again last week as imports remained low, analysts said. In foreign-exchange trading, the dollar renewed its slide, falling to a fresh one-year low against the euro and with the dollar index (DXY 76.07, -0.71, -0.92%) down 0.8% to 76.147, as the Federal Reserve kicks off its two-day meeting reviewing monetary policy. Dollar weakness typically boosts dollar-denominated commodities such as gold and oil because it makes them cheaper for holders of other currencies. Crude oil for October delivery rose $1.72, or 2.5%, to $71.43 a barrel in early North American trading. The contract, which expires at the end of trading on Tuesday, fell more than 3% Monday, retreating below $70 a barrel. November crude, which registered more volume, added $1.81, or 2.6%, to $71.74 a barrel. "Crude prices are higher after the dollar reversed the past few days' gains and as equity markets rebounded," wrote Nimit Khamar, analyst at Sucden Financial Research, in a note to clients. The oil market is still driven by external factors such as the dollar and equity markets, with the gains overshadowing "far-from-rosy fundamentals," Khamar said. Of interest to energy traders besides the Fed's two-day policy meeting, leaders of the world's most powerful economies will covene in Pittsburgh later this week for the Group of 20 summit. They're also awaiting inventories data from the American Petroleum Institute due on Tuesday afternoon. The Energy Information Administration will release its more closely watched supply report on Wednesday morning. Analysts surveyed by Platts expect a decline in crude stocks of 2.25 million barrels for week ended Sept. 18. The analysts also expect a drop in refinery utilization rates. However, "the decline in refinery run rates will likely not be steep enough to offset low imports," said Linda Rafield, senior oil analyst at Platts. The analysts surveyed by Platts also project buildups of 800,000 barrels in gasoline stocks as well as 1.5 million barrels in distillate stocks. Last week, the EIA said crude inventories decreased by 4.7 million barrels in the week ended Sept. 11, as imports dropped 2.1% from a week ago. In other energy futures Tuesday, October natural gas rose 10.3 cents, or 2.8%, to $3.679 per million British thermal units. October reformulated gasoline gained 4.6 cents, or 2.6%, to $1.7974 a gallon and October heating oil added 5.12 cents, or 2.9%, to $1.8029 a gallon.

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