Oil prices rise on eve of OPEC meeting

Oil prices rebounded on Tuesday from recent sharp losses as investors tracked rising stocks in cautious deals before a US interest rate decision and on the eve of OPEC's latest production meeting. In midday trading, the price of Brent North Sea crude for delivery in January added one dollar to $108.26 a barrel. New York's main contract, light sweet crude for January, advanced 74 cents to $98.51 per barrel. Crude futures had fallen sharply on Monday as investors worried over weaknesses and unanswered questions in last week's European Union summit deal to rescue the eurozone and shore up the European economy. "Today, crude oil prices are correcting higher with Brent near $108 and WTI above $98 per barrel, rebounding strongly from yesterday's sharp losses," said Sucden Financial Research analyst Jack Pollard. "Eurozone news flow is thin on the ground whilst European equities are posting modest gains. "We expect trading to be fairly cautious ahead of US retail sales, the Fed meeting this evening and OPEC meeting tomorrow, with crude prices likely to be confined to a fairly narrow range." The US Federal Reserve is later expected to see keep interest rates near zero -- where they have now been for three years -- as it searches for other tools to juice the economy in the last monetary policy meeting of the year. OPEC, meanwhile, appeared set to reach consensus over maintaining its official output quota at a meeting in Vienna, as data showed the cartel's crude production was at the highest level for more than three years last month. Ahead of Wednesday's OPEC meeting, the cartel's president Iran said the Organization of Petroleum Exporting Countries would reach consensus over its latest output decision. Kuwait's Oil Minister Mohammad al-Baseeri added that OPEC would likely keep its official production quota unchanged as the market was balanced and crude prices stable. The 12-nation cartel must decide whether to change its oil production levels in the face of heightened Iran tensions, higher Libyan output and a weak economic outlook. Analysts widely expect the Vienna-based organisation, which supplies a third of the world's crude, to maintain its official output target of 24.84 million barrels per day -- where it has stood for almost three years. But with the International Energy Agency (IEA) estimating that actual OPEC production hit 30.68 million barrels of oil per day (mbpd) in November -- the highest amount in more than three years -- the cartel may decide to issue a statement promising stricter compliance with its quotas.