* OPEC ministers arriving for meeting; no cuts seen
* Market awaits delayed U.S. inventory data due 2030 GMT
* EIA cuts oil demand forecast, raises output estimates
(Adds details and analyst comment. Updates prices.)
By Joshua Schneyer
NEW YORK, Sept 9 (Reuters) - Oil prices rose on Wednesday,
as optimism surrounding economic recovery and a weaker U.S.
dollar prompted investors to buy crude to hedge against
inflation.
Oil prices settled higher even as OPEC ministers signaled
no plans to cut oil production, and the U.S. Energy Information
Administration cut its oil demand forecast this year and next.
U.S. crude for October delivery <CLc1> settled up 21 cents,
or 0.3 percent, at $71.31 a barrel. Earlier Wednesday, prices
rose to a one-month high above $72, after surging more than $5
a barrel from their lows on Friday. London Brent <LCOc1> rose
41 cents, or 0.6 percent, to $69.83.
"The dollar is weak and the stock markets are up, so we're
seeing crude futures higher today," said Mark Waggoner,
president of Excel Futures in Huntington Beach, California.
Equities strengthened and the U.S. dollar fell near the
year's low against a basket of currencies, helping oil rise
slightly even as other commodities sputtered. Investors often
buy commodities such as oil to hedge against a weaker dollar.
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A U.S. Federal Reserve Beige Book report Wednesday helped
spur optimism in a potential economic recovery, with business
people in most U.S. districts reporting a "cautiously positive"
outlook for economic activity. []
OPEC appeared ready to keep oil production targets
unchanged at its Vienna meeting scheduled for 3:30 p.m. EDT
(1930 GMT) Wednesday.
"It is completely priced in that OPEC will leave output
unchanged," said Christopher Bellew, oil broker at Bache
Financial.
So far, none of the 12 OPEC members has stated any need to
cut production beyond the 4.2 million barrels per day slashed
since last autumn, as higher prices and signs of a
strengthening world economy shift the focus away from sluggish
fuel demand.
"With the price ranging between $68 and $73, what else do
you want? The price, everybody likes, consumers and producers,"
Saudi Arabian Oil Minister Ali al-Naimi told reporters when
asked if OPEC needed to change its output policy.
[]
The U.S. Energy Information Administration on Wednesday
cuts its global oil demand forecast for 2009 and 2010 and upped
its projections for OPEC production. []
Soft demand in the United States has forced refiners such
as Valero <VLO.N> to sack hundreds of workers and idle several
major processing units. []
The market will get a reading on U.S. crude stocks with
numbers from the American Petroleum Institute due on Wednesday
at 4:30 p.m. EDT (2030 GMT). The U.S. Energy Information
Administration will release its data on Thursday at 11 a.m. EDT
(1500 GMT). Both have been delayed a day by Monday's Labor Day
holiday.
A Reuters poll showed analysts expected crude stocks to
fall by 1.5 million barrels, distillate supplies to increase by
700,000 barrels and gasoline inventories to decline by 1.4
million barrels. []
Traders were keeping an eye on Hurricane Fred, which
strengthened into a powerful Category 3 storm in the eastern
Atlantic Ocean on Wednesday but posed no threat to any land.
[]
(Additional reporting by Richard Valdmanis and Gene Ramos in
New York, Nick Trevethan in Singapore and Emma Farge in London;
Editing by Lisa Shumaker)
