Oil prices rose above $69 a barrel on Tuesday as spot gold crossed a psychological threshold and ahead of an OPEC meeting analysts said would see more target compliance rhetoric but no change in output limits.
NYMEX crude for October delivery stood at $69.86 a barrel by 1215 GMT (8:15 a.m. EDT), up $1.84 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 $1.75 to $68.28 a barrel.
Gold on Tuesday powered through the $1,000 per ounce barrier on a wave of pent-up technical momentum, backed by dollar weakness and a slight risk of inflation, analysts said.
Today's move above $1,000 probably triggered the jump in crude markets by spurring inflation fears and buying oil as a hedge against inflation, said oil analyst Eugen Weinberg at Commerzbank.
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.
Nobody expects anything from them, said Weinberg. There are some other issues; compliance, non-OPEC production, and huge ventures worldwide that might still have an impact, but otherwise nobody expects them to cut any more production.
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.
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.
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, September 9, at 4:30 p.m. EDT and Energy Information Administration snapshot of crude oil, distillates and gasoline stocks will be pushed out to Thursday, September 10, at 11 a.m. EDT.
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, but did not immediately threaten any land, the U.S. National Hurricane Center said.
(Additional reporting by Nick Trevethan in Singapore; editing by James Jukwey)