* Oil higher on gold jump and dollar weakness
* OPEC poised to keep output steady at Sept. 9 meeting
(Updates prices, details throughout)
By Richard Valdmanis
NEW YORK, Sept 8 (Reuters) - Oil prices on Tuesday posted
their biggest gain in more than a month as weakness in the U.S.
dollar fired up inflation fears and triggered a rush of buying
across commodities markets.
The surge back over $70 a barrel cast a spotlight on the
OPEC cartel on the eve of their production policy meeting in
Vienna, with representatives signaling the group would likely
keep output unchanged.
NYMEX crude for October delivery <CLc1> rose $3.30 or 4.85
percent to $71.32 a barrel by 1710 GMT, the largest percentage
increase since July 30. London Brent crude <LCOc1> rose $3.12
to $69.65 a barrel.
The gains came as the dollar slumped to its lowest level in
almost a year against a basket of currencies and gold rallied
above $1,000 an ounce, its highest since March 2008. []
"The petroleum markets have jumped back to the upside with
their first impulse following the holiday, with a similar
buying spree in the equity markets and a weaker U.S. dollar
helping to spur the rally,"
"With gold prices testing the $1,000-per-ounce level,
commodity price inflation is back in the headlines," said Tim
Evans, analyst at Citi Futures Perspective in New York.
"Although the employment picture remains bleak and will
ultimately limit the upside in our view," he added.
The Organization of the Petroleum Exporting Countries meets
on Wednesday, with most analysts expecting the group, the
source of more than a third of the world's oil supply, to
maintain official output levels. []
Saudi Arabia's Oil Minister Ali al-Naimi said producers and
consumers are happy with current oil prices, though he added
world crude inventories appeared too high. []
Speaking ahead of the meeting in Vienna, Naimi described
the oil market as "steady and in good shape," although when
asked if oil inventories were too high, said "Yes, they are a
little bit."
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.
Investors will be on watch for inventory data, delayed by a
day this week due to Monday's holiday. Analysts polled by
Reuters Tuesday expected the data to show a decrease in U.S.
crude inventories of 1.5 million barrels. []
The American Petroleum Institute's petroleum stocks report
will be released Wednesday at 4:30 p.m. EDT (2030 GMT) and
Energy Information Administration report will be issued
Thursday at 11 a.m. EDT (1500 GMT). []
Traders will also keep an eye out as Tropical Storm Fred
formed in the eastern Atlantic Ocean on Monday with top winds
of 40 mph (65 kph), but did not immediately threaten any land,
the U.S. National Hurricane Center said. []
(Additional reporting by Nick Trevethan in Singapore and Chris
Baldwin in London; Editing by David Gregorio)
