Oil Trades Near $71 as Dollar Declines, OPEC Ministers Gather

Sept. 9 (Bloomberg) -- Crude oil traded little changed near $71 a barrel after rising yesterday as a slump in the dollar spurred demand for commodities, and as OPEC ministers gathered in Vienna to set output levels.

Oil gained as much as 5.5 percent yesterday as the U.S. currency dropped to the lowest level this year against the euro and on speculation inflation will accelerate. The oil market is in “good shape,” Saudi Arabian Oil Minister Ali al-Naimi said, signaling the group is unlikely to change production.

“The dollar is continuing to put immense pressure on oil to trade higher thanks to its downward price spiral,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “Equities confidence and stabilization is helping to put a floor under the price of oil.”

Crude oil for October delivery gained 15 cents, or 0.2 percent, to $71.25 on the New York Mercantile Exchange at 9:35 a.m. Sydney time. Yesterday, the contract rose $3.08, or 4.5 percent, to $71.10, the biggest gain since Aug. 19. Prices are up 60 percent this year.

The Standard & Poor’s 500 Index rose for a third day, gaining 0.9 percent in New York and the Dow Jones Industrial Average climbed 0.6 percent. The euro traded at $1.4503 at 7:56 a.m. in Tokyo from $1.4478 in New York yesterday, when it reached $1.4535, the highest level since Dec. 18.

“If the dollar continues to fall, oil is only going to go higher,” Sander said.

OPEC Unchanged

Members of the Organization of Petroleum Exporting Countries have said the group should keep its production target unchanged at 24.845 million barrels a day when it meets today. All of the 26 analysts surveyed by Bloomberg News predicted the organization will keep quotas steady.

The OPEC meeting “should be a non-event, with most expecting a no-change supply outcome,” said Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. “A surprise cut in supply would be met positively, although a still lax compliance record, around 75 percent currently, suggests the upside would be short-lived.”

The market is “very well supplied,” Saudi Arabia’s Al- Naimi said before the meeting. “The price is good for everybody: consumers, producers.”

An Energy Department report tomorrow is likely to show U.S. crude and gasoline inventories declined last week, a Bloomberg News survey showed.

Brent crude oil for October settlement rose $2.89, or 4.3 percent, to close at $69.42 a barrel on the London-based ICE Futures Europe exchange yesterday. It was the first increase in seven days.