UPDATE 8-Oil rises above $74 on expected inventory draw

                                
 * OPEC keeps oil supply unchanged
                                
 * Communique calls for compliance with existing quotas
                                
 * Reuters poll sees lower U.S. crude, distillate stocks
 (Recasts, updates prices, market activity)
                                
 By Edward McAllister
                                
 NEW YORK, Dec 22 (Reuters) - Oil prices rose slightly in
thin pre-holiday trade, ahead of weekly inventory data which is
expected to show a draw in U.S. crude stocks.
                                
 Crude inventories fell by 1.6 million barrels last week, as
refiners drew down inventories, according to a Reuters poll of
analysts on Monday. Distillate stocks are expected to have
fallen by 2.1 million barrels. [EIA/S]
                                
 The new front-month February contract for U.S. crude
futures <CLc1> rose 56 cents to $74.28 a barrel by 1:18 p.m.
EST (1818 GMT), after earlier falling $1, pressured by a
stronger dollar.
                                
 In London, Brent crude for February <LCOc1> rose 41 cents
to $73.40.
                                
 "People want to be flat before the API and DOE data," said
Stephen Schork, editor at the Schork Report in Villanova,
Pennsylvania.
                                
 Weekly inventory data will come from the American Petroleum
Institute report at 4:30 p.m. EST (2130 GMT) Tuesday and from
the U.S. Energy Information Administration on Wednesday.
                                
 Crude prices fell earlier after OPEC agreed to maintain its
existing production targets and as the dollar rose against
other currencies.
                                
 OPEC oil ministers, content with current oil prices, agreed
to leave output unchanged in a meeting on Tuesday and decided
to meet again on March 17. [ID:nLDE5BL09K]
                                
 U.S. equities added to gains on Tuesday after a
bigger-than-expected jump in November existing home sales
reassured investors the housing market was stabilizing. [.N]
                                
 OPEC OUTPUT
                                
 Oil prices above $70 a barrel have satisfied OPEC in recent
months enough for the group to decide not to change its output
targets.
                                
 The Organization of the Petroleum Exporting Countries pumps
about 50 percent of the world's oil exports and has seen crude
prices almost double since the start of the year, after it
sliced output when the economic recession hit fuel demand.
                                
 The deal left the implied target for OPEC output, excluding
Iraq, at 24.84 million barrels per day. [ID:nLDE5BL0Y4]
                                
 But oil traders and analysts were worried OPEC members were
not sticking to their production targets and that output was
rising steadily. [ID:nLDE5BL0I9]
                                
 "There is some reason for concern because, if you look at
the numbers, the upside creep in production each month is
considerable," said Mike Wittner, global head of oil research
at Societe Generale in London.
                                
 "At this point, compared to the low point in
February-April, OPEC output is about 1 million bpd higher than
it was. So, although we are bullish going forward, OPEC really
does need to address compliance."
                                
 OPEC's adherence to its output targets peaked in February
at about 80 percent, but has since slipped to only about 60
percent.
                                
 Edward Meir, senior commodity analyst at brokers MF Global,
said the oil market was likely to slip lower.
                                
 "We suspect the ensuing price bias will be to the downside.
In the least, participants may be unnerved by OPEC's continuing
refusal to tighten export quotas," he said.
 (Additional reporting by Robert Gibbons in New York and
Christopher Johnson in London; Editing by David Gregorio)