* OPEC ministers expected to keep supply curbs unchanged
* Dollar at highest in two months vs yen but down vs basket
* Reuters poll sees lower U.S. crude, distillate stocks
(Updates throughout, changes dateline from SINGAPORE)
By Christopher Johnson
LONDON, Dec 22 (Reuters) - Oil rose to around $74 per barrel
on Tuesday as OPEC met to decide output targets and ahead of
data expected to show a fall in crude and distillate inventories
in the United States.
OPEC members, content with current prices, will leave oil
production targets unchanged, ministers said as they arrived for
their meeting in the Angolan capital of Luanda. []
The dollar rose to a two-month high against the yen as
investors unwound short dollar positions before the year-end,
but the U.S. currency eased against a currency basket after
nearing a high of more than three months on Monday. []
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The new front-month February contract for U.S. crude futures
<CLc1> rose 25 cents to $73.97 a barrel by 0845 GMT. The January
contract expired on Monday down 89 cents at $72.47, pressured by
the stronger dollar.
London Brent crude for February <LCOc1> rose 31 cents to
$73.30, slipping below U.S. crude for the first time in a month.
Edward Meir, senior commodity analyst at brokers MF Global,
said the oil market was likely to slip lower if OPEC did as
predicted and decided to leave output unchanged.
"We suspect the ensuing price bias will be to the downside.
In the least, participants may be unnerved by OPEC's continuing
refusal to tighten export quotas," he said.
"In fact, given energy's bearish fundamentals, the cartel is
lucky prices are not lower than they actually are," Meir added,
citing recent weakness of the dollar, "investor infatuation with
commodities, and a return of fund money to the commodity space".
WINTER CHILL
Oil prices received some support from expectations that U.S.
crude stocks had fallen by 1.6 million barrels last week, as
refiners drew down inventories for year-end tax issues.
A Reuters poll said the drop would follow declines of more
than 3 million barrels in the previous two weeks. []
Distillate stocks, which include heating oil and diesel,
were expected to be down 2.1 million barrels as last week's cold
and snow boosted heating oil demand in the U.S. Northeast, the
poll showed ahead of the release of the weekly American
Petroleum Institute report at 4:30 p.m. EST (2130 GMT).
Data from the government Energy Information Agency (EIA)
will be released on Wednesday.
Also supportive was a forecast of colder-than-normal weather
across much of the United States from January to March by
private forecaster WSI in its latest outlook. []
For a factbox of U.S. weather forecasts, click
[]
But despite cold weather and the expected fall in U.S.
distillates stocks last week, heating fuel stockpiles are still
above year-ago levels. According to the International Energy
Agency, almost 100 million barrels of distillates were stored on
ships at sea at the end of November.
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 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. []
(Additional reporting by Judy Hua in Singapore; editing by Sue
Thomas)
