* Iraq official says Iranian troops in Iraqi oilfield
* Cold U.S. weather cuts natgas stocks, supports oil
* OPEC won't change output-OPEC president, Saudi minister
(Adds details, changes dateline from previous London)
NEW YORK, Dec 18 (Reuters) - Oil rose above $73 a barrel on
Friday, after an incursion by Iranian troops into an Iraqi
oilfield signaled tensions between two major crude exporters,
while a firming dollar showed investors remain wary of risky
commodities.
U.S. crude futures <CLc1> for January delivery briefly
surged as high as $74.69 a barrel earlier Friday, on cold U.S.
weather that may boost fuel demand, and after reports that
Iranian soldiers crossed into Iraq with tanks and laid claim to
an oilfield there.
Oil prices later pared most of the gains as the dollar
surged to a new 3-1/2-month high against the euro, as investors
cut their risk and sought safe haven assets such as U.S.
Treasury bonds. []
Iraq's Deputy Interior Minister said Iranian troops were
still occupying an oil well in a southern Iraqi oilfield. Iraq
hasn't taken any military action, but officials alleged
"repeated" Iranian incursions into its territory this week.
[]
"The Iraq-Iran issue is bringing some nervousness in the
market but I think there is a very high possibility that there
is nothing in the story," said Eugen Weinberg, oil analyst at
Commerzbank in Frankfurt.
"If there is some sort of conflict, then the price reaction
is too small but if it is nothing the reaction is too high,"
Weinberg added.
U.S. crude for January delivery <CLc1> rose 38 cents to
$73.03 by 11:39 a.m. EST (1639 GMT). London Brent crude <LCOc1>
was down 15 cents at $73.22.
A cold snap gripping the U.S. Northeast, the world's top
heating oil market, continued to support oil prices, but some
analysts said that Iran-Iraq skirmishes were unlikely to
disrupt oil markets for long.
"Cold temperatures and Iran worries put the bulls on ice,"
said PFGBest energy analyst Phil Flynn, in a note to clients.
"Is this chilly development for real?," Flynn added.
Amid cold weather, U.S. natural gas inventories fell for
just the second time this winter season, down 207 billion cubic
feet, according to the U.S. Energy Information Administration.
[]
OPEC MEETING
The Organization of the Petroleum Exporting Countries
(OPEC) will not change output targets when it meets in Angola
on Dec. 22, the group's president said on Friday.
[]
"Oil prices are trading at $70 to $75 per barrel which is
the level our group has defended. I believe we will maintain
the decisions that were taken in the past about output quotas
and keep targets unchanged," Jose Botelho de Vasconcelos told
Angolan Radio Ecclesia. []
That view was echoed by the group's most influential oil
minister, Saudi Arabia's Ali al-Naimi.
"The (meeting) will not lead to any change in production,"
Saudi-owned al-Hayat quoted Naimi as saying. "And the oil price
of $75 to $80 is something we all want," Naimi told the
newspaper in Copenhagen, where he was attending the U.N.
climate summit. []
U.S crude oil is expected to rise to an average of $76.40 a
barrel in 2010 and $82.70 in 2011, a Reuters poll showed, as
global economic recovery solidifies and the demand for fuel
begins to soak up available supply. []
World leaders including U.S. President Barack Obama met in
Copenhagen on Friday to push for a new global climate deal, but
they appeared far from agreement on the core issue of
greenhouse gas emissions. []
"If there is no strong binding agreement the market might
take it as a signal that fossil fuel demand will remain as it
is, which helps prices," Commerzbank's Weinberg said.
(Reporting by Joshua Schneyer and Edward McAllister in New
York and Joe Brock in London; Editing by Marguerita Choy)
