SINGAPORE (AP) -- Oil prices steadied Wednesday after tumbling more than $3 a barrel in the previous session on a strengthening U.S. dollar and data showing a dramatic drop in American fuel demand.

Retail gas prices, meanwhile, increased for the 16th straight day. AAA reported the national average price for a gallon of regular unleaded gasoline rose to a new record high of $3.617, up 1 cent from the previous day.

Trading in crude futures was cautious in Asia as market participants awaited the Federal Reserve's decision on interest rates later Wednesday.

Analysts believe a quarter percentage point rate cut is already factored into the oil market. A decision to hold rates steady could further strengthen the dollar, though, causing oil to resume its slide.

"The markets will now wait and see ... what's going to happen tonight, unless there's more news on the supply side," said David Moore, a commodity strategist with the Commonwealth Bank o...