(Repeats to more subscribers)
* Dollar hits highest in 2 mths vs yen, pressuring oil
* OPEC ministers expected to keep supply curbs unchanged
* China's Nov implied oil demand up 18.7 pct on year
By Judy Hua
SINGAPORE, Dec 22 (Reuters) - Oil held steady on Tuesday
ahead of an OPEC meeting, with the firmer dollar countering an
expected fall in crude and distillate inventories in the United
States along with the sustained strong demand in China.
The U.S. currency rose to its highest versus the yen since
late October as investors unwound short dollar positions
heading into the year-end. []
Crude for the new front-month February contract <CLc1> fell
7 cents to $73.65 a barrel by 0345 GMT. The January contract
expired on Monday down 89 cents at $72.47, pressured by the
stronger dollar.
London Brent crude for February <LCOc1> shed 22 cents to
$72.77.
"Trading volumes will be decreased because of the Christmas
holidays and OPEC is expected to keep its quota unchanged,
therefore there is no specific factors which can drive this
market up and down," said Ken Hasegawa, a commodity derivatives
sales manager at broker Newedge in Tokyo.
"Currency is the most important factor at the moment to
move the crude market," he said, adding that prices are
expected to move within the range of $72 and $75.
U.S. crude stocks were expected to have fallen by 1.6
million barrels last week, as refiners drew down inventories
for year-end tax issues, a drop which would follow declines of
more than 3 million barrels in the previous two weeks, an
initial Reuters poll found. []
Distillate stocks, which include heating oil and diesel,
were expected to be down 2.1 million barrels as last week's
cold and snow bolsted heating oil demand in the U.S. Northeast,
the nation's largest heating oil market, the poll showed ahead
of the release of the weekly report by the American Petroleum
Institute later in the day.
Weekly data from the government Energy Information Agency
(EIA) will be released on Wednesday.
COLD SNAP
"Cold weather is a supportive factor, but not enough to
make a huge long position at the moment. The inventory is high
anyway," Hasegawa said, referring to the 98 million barrels of
distillates stored on ships by the end of November, according
to International Energy Agency data.
Despite the expected fall in U.S. distillates inventories
last week, winter heating fuel stockpiles are still above
year-ago levels and more than 3 trillion cubic feet of natural
gas are in store.
Colder-than-normal weather is expected across much of the
United States from January to March, private forecaster WSI
said in its latest winter outlook on Monday. []
The current El Nino event and the cold north Pacific will
contribute to the unusually cold weather, which will help boost
gas and power demand in the large consuming regions, especially
in February and March, the forecaster said.
For Factbox on U.S. winter weather forecasts, click
[]
On the supply front, OPEC was set to leave output limits
unchanged at a meeting in Angola on Tuesday, officials from the
producer group said, and appeared likely to call for improved
compliance with existing curbs. []
China is also boosting exports to an already well supplied
market with gasoline up 71 percent in November from a year ago,
while diesel rose 12 times to 390,000 tonnes, as refiners
cranked up throughput to new highs, prompting supplies to grow
swifter than consumption, which has shown firm recovery in
recent months. []
Apparent oil demand in China, the world's second-largest
energy consumer, rose by a record annual rate of 18.7 percent
in November from a year earlier, though the brisk growth is
partly due to a low base last year, Reuters calculations based
on official data showed on Tuesday. []
(Editing by Ramthan Hussain)
