* Saudi oil minister says $70-$80 price "ideal"
* Technicals show crude heading towards $80 []
* Coming Up: Fed meeting minutes from Sept. 21; 1800 GMT
(Updates prices)
By Alejandro Barbajosa
SINGAPORE, Oct 12 (Reuters) - Oil fell for a second day on
Tuesday, down 1 percent after Saudi Arabia signalled OPEC would
maintain current production levels at the group's meeting later
this week, letting the market focus on the stronger dollar.
U.S. crude for November <CLc1> slid 78 cents to $81.43 a
barrel by 0632 GMT, down $3 from last week's five-month high of
$84.43. ICE Brent <LCOc1> fell 75 cents to $82.97.
The dollar rose by 0.3 percent against a basket of
currencies <.DXY> in early trade on Tuesday, after scrambling
off recent steep lows against the euro and the yen on Monday.
[]
"What has caused the dollar to rebound is that the market
has already priced in QE2 (a second round of quantitative
easing). A stronger dollar will weaken oil prices, especially
when equity markets are rather quiet."
Expectations that the U.S. Federal reserve would conduct a
second round of expansionary monetary policy pushed prices
higher last week. Traders will be scanning the minutes of the
FOMC meeting on Sept. 21 due later in the day for clues on
further quantitative easing, or QE.
The market's direction "very much depends on tonight's FOMC
meeting minutes and whether there will be any signs or clues on
potential QE2 and when it will happen," said Serene Lim, a
Singapore-based oil analyst at ANZ.
"IDEAL" PRICE
Saudi Arabian Oil Minister Ali al-Naimi said he was happy
with the oil market as he arrived in Vienna on Monday for the
first meeting of the Organization of the Petroleum Exporting
Countries (OPEC) in seven months, to take place this Thursday.
[]
Naimi also said prices of between $70 and $80 were "ideal,"
indicating the producer group's most powerful member has no
plans to pursue higher prices.
"The market is very well balanced, everyone is happy with
the market," Naimi said. "I am comfortable with economic
growth."
OPEC has not officially changed its production ceiling
since December 2008. Levels of compliance with implied targets,
however, have slipped to 57 percent, according to a Reuters
survey, leaving plenty of scope to adjust output informally as
the market dictates. []
The OPEC basket price, an average of the group's most
representative crude grades, has so far been $75.38 this year,
up from a mean of $61.06 for all of 2009.
"OPEC members are very likely to maintain production
quotas, and they have mentioned a price of $70 to $80 is
comfortable," Lim said.
U.S. crude oil stockpiles probably rose for a second
straight week last week, adding 1.3 million barrels in the week
to Oct. 8 due to higher imports, a preliminary Reuters poll
ahead of weekly inventory data showed on Monday. []
Distillate stocks, which include heating oil and diesel,
were projected down 1.6 million barrels for a third consecutive
weekly decline, while gasoline inventories were also forecast
down for a third week, at a fall of 1.4 million barrels.
Industry group the American Petroleum Institute will issue
its weekly inventory report on Wednesday at 2030 GMT, a day
later than usual because of Monday's Columbus Day holiday.
Government statistics from the U.S. Energy Information
Administration will follow on Thursday at 1500 GMT, also a day
later than usual.
(Additional reporting by Nick Trevethan; Editing by Michael
Urquhart)
