UPDATE 2-Oil edges up above $68; G20 lifts sentiment

                                
 * G20 stimulus plans may mean rising oil demand
                                
 * U.S. markets closed for Labor Day holiday
                                
 * OPEC seen keeping output targets unchanged
                                
 
                                
(Updates throughout, changes dateline, pvs PERTH)
                                
 By Catherine Bosley
                                
 LONDON, Sept 7 (Reuters) - Oil prices edged above $68 a
barrel in thin trade on Monday, with sentiment cheered by
buoyant Asian and European equities and by the G20's pledge at
the weekend to maintain economic stimulus plans.
                                
 U.S crude for October delivery <CLc1> was up 63 cents to
$68.65 a barrel by 1024 GMT. London Brent crude <LCOc1> rose 88
cents to $67.70 a barrel.
                                
 Group of 20 finance leaders, who met in London on Saturday,
said they would not remove economic stimulus measures until the
recovery was well entrenched, raising the prospect of higher
fuel demand in coming months. [ID:nL5327479]
                                
 Along with U.S. data released late last week showing a
slowdown in worker layoffs, the G20's decision helped lift Asian
and European shares. [ID:nSP487193] [.E]
                                
 But analysts said oil prices were likely to remain in a
narrow range for most of the session because U.S. markets were
closed for Labor Day, which marks the end of the summer holiday
season and the peak "driving season".
                                
 "As the long Labor Day weekend comes to an end, we're
looking at the end of peak gasoline demand season in the U.S.,
which means we're now entering a period of slack seasonal demand
with refineries scaling back their runs," said Toby Hassall, a
commodities analyst at CWA Global Markets in Sydney.
                                
 Oil prices, which fell 6.5 percent last week, have been
trading in a range between $65 and $75 a barrel since the start
of August, with prices swinging on economic data as investors
seek clues about the speed of a recovery from the recession.
                                
 Oil came under pressure last week on concerns about the
jobless rate in the United States, which hit a 26-year high,
though data showed the pace of layoffs was slowing.
                                
 
                                
 OPEC MEETING
                                
 Increased crude supplies from the Organization of Petroleum
Exporting Countries (OPEC) due to slipping compliance, could
also put downward pressure on oil prices in the near term,
analysts said.
                                
 OPEC members meet in Vienna for a quarterly output policy
meeting this week, with most analysts expecting the group, the
source of more than a third of the world's oil supply, to
maintain its official output target to keep prices stable around
$70. [O/POLL]
                                
 "We expect another OPEC quota rollover to be the result of
the meeting; in addition, there will undoubtedly be calls for
better quota compliance (i.e., lower production) from OPEC
members such as Angola, Iran, and Venezuela," Societe Generale
said in a research note.
                                
 For a preview of the OPEC meeting, click on [ID:nL468999]
                                
 Traders will also be watching a weather disturbance that is
moving westward from Africa. There is a medium chance of it
becoming a tropical cyclone in the next 48 hours, the U.S.
National Hurricane Centre said on Sunday. [ID:nN06222763]
                                
 Crude oil speculators on the New York Mercantile Exchange
reduced their net long positions in the week to Sept 1, the
Commodity Futures Trading Commission said in a report on Friday.
[ID:nN04188950]
                                
(Additional reporting by Fayen Wong in Perth; Editing by
Keiron Henderson)