NEW YORK (Dow Jones)--Crude futures were down slightly Tuesday just as recent highs were coming back in sight, though a smaller-than-expected gain in wholesale prices limited losses. Light, sweet crude for December delivery traded 14 cents, or 0.2%, lower at $78.76 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 25 cents lower at $78.51 a barrel. Oil futures have risen steadily all year as a primary venue for funds leaving the weakening dollar, as crude becomes cheaper for holders of other currencies. A weaker dollar can lead to inflation, and a move by the Federal Reserve to raise interest rates in order to reduce that threat would likely reverse the dollar's recent losses against other currencies. But a report Tuesday from the U.S. Labor Department of a lower-than-expected increase in wholesale prices reduces the odds of a rate hike in the near term. The producer price index for finished goods was up 0.3% in October, below the 0.6% average forecast in a Dow Jones Newswires survey of economists. Oil prices bounced back from the intraday low of $78.14 a barrel after the report. "It's a continuation of the bearish fundamentals versus the bullish effects of the dollar," said Tom Bentz, a broker and analyst with BNP Parbias Commodity Futures Inc. Oil prices are bumping up against $80 a barrel after Monday's 3% rally, toward the upper end of a trading range that's contained futures for the last month. On the top, prices are bound by data from the U.S. Department of Energy and other sources, which highlight that developed economies emerging from recession worldwide haven't put much of a dent in a glut of surplus crude and fuel. Analysts expect U.S. oil supplies to remain unchanged in weekly data due out Wednesday, according to a Dow Jones survey, though Tropical Storm Ida disrupted imports last week, leaving some oil at sea and outside the government tally. Gasoline stocks are seen increasing 400,000 barrels, while distillate inventories, including heating oil and diesel, are expected to drop 600,000 barrels. Emerging markets, particularly China, the largest oil consumer after the U.S., are growing faster than expected. That's kept oil prices from falling back into the summer's trading range, which maxed out at $75 a barrel. A dip below $76 a barrel. However, emerging on Friday in intraday trading helped provoke Monday's rally back above $78 a barrel. "Although this emerging market demand growth is currently not strong enough to offset weakness in (developed economies), going forward it is expected to crowd out future (developed) demand growth requiring high prices to keep the market balanced," wrote analysts with Goldman Sachs Group Inc. (GS). Front-month December reformulated gasoline blendstock, or RBOB, recently traded 42 points, or 0.2%, lower at $1.9826 a gallon. December heating oil traded 27 points, or 0.1%, higher at $2.0347 a gallon.

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