Oil prices rose above $69 a barrel on Tuesday ahead of an OPEC ministers meeting, which analysts said would see more target compliance rhetoric but no change in output limits.
NYMEX crude for October delivery stood at $69.20 a barrel by 0911 GMT, up $1.18 from Friday's close. There was no settlement price on Monday because NYMEX was closed for the U.S. Labor Day holiday.
London Brent crude rose $1.15 to $67.68 a barrel.
The Organization of the Petroleum Exporting Countries meets in Vienna on Wednesday, with most analysts expecting OPEC, the source of more than a third of the world's oil supply, to maintain its official price target of around $70.
"One day ahead of the OPEC meeting in Vienna, the general view is that the current output policy will remain unchanged," analysts at JBC Energy Market in Vienna wrote.
"A further tightening of supplies could be perceived as OPEC having a very dire view of the global economy."
Crude prices, although up 50 percent so far this year, are still less than half their peak struck in July 2008, and consumers and producers are happy with that, Saudi Arabia's Oil Minister Ali al-Naimi said on Tuesday.
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."
Compliance with output targets remains an issue.
"A major issue will be compliance. It will be discussed and stressed by many countries with the hope others will comply," a Gulf delegate at the meeting said.
"The most likely outcome is that they will keep the ceiling and quota unchanged," he said. "It's going to be a smooth and easy meeting."
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
GOLD SPARK
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.
Traders said Tuesday's early gains were rangebound but came as spot gold shot past the key psychological $1,000 per ounce mark at 0753 GMT.
"Gold is a bit stronger, as are the stock markets, but we're still in the same range as we were yesterday," said Christopher Bellew, an oil broker at Bache Commodities.
Investors will be on watch for inventory data, delayed by a day this week due to Monday's holiday.
The American Petroleum Institute's petroleum stocks report will be delayed one day to Wednesday, Sept. 9, at 4:30 p.m. EDT (2030 GMT) and Energy Information Administration snapshot of crude oil, distillates and gasoline stocks will be pushed out to Thursday, Sept. 10, at 11 a.m. EDT (1500 GMT).
"The big thing is distillate stocks, which are quite high," National Australia Bank's commodities economist Ben Westmore said.
"People are assessing economic indicators — industrial production and so on to see if the supply overhang will be redressed any time soon."
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.
