Oil steady after dollar-led gains; OPEC eyed

                                
 * WTI around $71/bbl after biggest gain in almost a month
                                
 * OPEC meet gets underway; no cuts seen, focus on
compliance
                                
 * Inventory data may weigh, storm supply-side support fades
                                
 By Nick Trevethan
                                
 SINGAPORE, Sept 9 (Reuters) - Oil prices held steady around
$71 a barrel on Wednesday, consolidating the previous session's
dollar-driven 4.5 percent rally as investors waited for an OPEC
meeting to conclude and fresh U.S. inventory data.
                                
 The dollar index <=USD> shed more than 1 percent on Tuesday
to hit a one-year low of 77.05, after breaking major chart
support. The euro <EUR=> was up around $1.4507, having risen 1
percent on Tuesday to end at $1.4490 in New York, and having
touched its highest this year. [USD/]
                                
 "This is very much in a dollar-driven, inflation-driven,
hysteria-driven market," MF Global commodity and energy analyst
Edward Meir said.
                                
 "Oil looks terrible on the charts. OPEC will likely leave
things unchanged and will end the meeting with exhortations to
stick to quotas. There is potential weakness, yet we saw the
biggest move in a month."
                                
 NYMEX crude for October delivery <CLc1> stood at $71.04 a
barrel by 0215 GMT, down 6 cents from Tuesday's settlement.
London Brent crude <LCOc1> fell 18 cents to $69.24 a barrel.
                                
 U.S. crude rallied 4.5 percent by Tuesday's settlement from
the previous settle on Friday. With prices more-or-less flat
and no settlement on Monday due to the Labor day holiday, the
gains are the biggest since mid-August.
                                
 Crude prices, although up 50 percent so far this year, are
still less than half their peak struck in July 2008, a level
that OPEC kingpin Saudi Arabia said both producers and
consumers are happy with.
                                
 The Organization of the Petroleum Exporting Countries
(OPEC) is meeting in Vienna on Wednesday, and comments from
officials suggest it is likely to keep the official output
target stable. [nL8235192]
                                
 For graphics on OPEC compliance and output cuts, click:
 http://graphics.thomsonreuters.com/099/CMD_OPCMPL0909.gif
 http://graphics.thomsonreuters.com/099/CMD_OPEC0909.gif
                                
 Later on Wednesday, the market will get its first steer on
U.S. crude stocks with numbers from the American Petroleum
Institute due at 2030 GMT, followed by the Energy Information
Administration's on Thursday at 1500 GMT. Both are delayed a
day by the Labor Day holiday.
                                
 A Reuters preliminary analysts' poll calls for a 1.5
million barrel drawdown in crude stocks, a 700,000 barrel
increase in distillate supplies and a 1.4 million barrel
decline in gasoline inventories. [EIA/S]
                                
 With the driving season over and the heating season yet to
begin, traders will be watching to see whether demand in the
world's top energy user reflects hopes for economic recovery.
                                
 Valero, the biggest refiner in the U.S., has decided that
fundamentals are grim enough to sack hundreds of workers and
idle several major processing units. [nN08294602]
                                
 "That looks pretty bearish but its not a fundamentally
driven market. It's about inflation, the dollar and macro
numbers," a trader in Singapore.
                                
 Traders will keep half an eye out on Tropical Storm Fred as
it grows towards hurricane force in the eastern Atlantic, but
its path should keep it clear of land for the next several days
and it should skip U.S. Gulf oil and gas installations
entirely. [ID:nN08277925]
 (Editing by Michael Urquhart)