U. S. crude oil futures gained nearly 3 percent Tuesday as a weaker dollar and expectations of a draw in inventory prompted buying with late trading volatile as the front-month October contract expired. U. S. natural gas futures traded higher along with firm cash gas and stronger crude futures despite continued concerns over record high storage and a sluggish economy.

The American Petroleum Institute, in a report released Tuesday, said crude stocks rose 276,000 barrels to 337.2 million barrels last week. Distillate stocks fell 1.9 million barrels to 168.4 million barrels and gasoline stocks jumped 3.8 million barrels to 212.6 million barrels, the API said.

U. S. retail gasoline demand rose 1.4 percent last week against the previous week's level with some strength shown in the New England, Central Atlantic, and Midwest regions, according to a MasterCard SpendingPulse report on Tuesday.

U. S. crude oil stockpiles rose unexpectedly last week as imports sped up and refiners slowed down, the American Petroleum Institute said on Tuesday.

OPEC does not need to cut output next year, Saudi Arabia's oil minister told Reuters on Tuesday.

The U. S. Energy Information Administration will release a separate report on nationwide petroleum inventories today.

Crude oil is expected to remain subdued early in the session as API reported a build in crude oil inventory. However, crude oil may take direction from EIA inventory report and movement in equities later in the day.