NEW YORK (MarketWatch) -- Crude-oil futures rose Wednesday for a third session as analysts expected weekly petroleum data to show another drop in U.S. crude inventories and as traders looked ahead to an OPEC meeting.
Also pushing oil higher, the U.S. dollar continued to slide against most of its major rivals. Meanwhile, investors awaited the Federal Reserve's Beige Book, a compilation of anecdotes about the economy.
Light sweet crude for October delivery was up $1.25, or 1.8%, at $72.35 a barrel on the New York Mercantile Exchange, after tapping a high of $72.45, the highest level since Aug. 28.
"Oil prices surge higher on increased optimism about the world economy and a weaker dollar," said Amrita Sen, an analyst at Barclays Capital, in a note. "We expect no change to its policy stance" at the Organization of Petroleum Exporting Countries meeting.
The American Petroleum Institute and the Energy Information Administration will each issue their separate supply reports a day late -- on Wednesday afternoon and Thursday morning in Washington, respectively, due to Monday's Labor Day holiday.
Analysts surveyed by Platts expect the data to show a decline in crude supplies of 1.8 million barrels for the week ended Sept. 4. They also predict a drop of 1.5 million barrels in gasoline inventories and an increase of 1.1 million barrels in distillates, which include heating oil and diesel.
The EIA last week reported a smaller-than-expected decline in crude inventories for the week ended Aug. 28. It also reported a sharp drop in gasoline inventories as demand rose. See related story.
Members of the OPEC cartel, which accounts for about one-third of the world's oil production, have been gathering in Vienna, ahead of a meeting scheduled for Wednesday night local time.
Analysts expect the cartel to keep its production quota unchanged while pressuring member countries to comply with their current production limits.
Saudi Arabian Oil Minister Ali Naimi said Tuesday that crude markets were "in good shape," according to the Associated Press.
But in a note to clients issued Wednesday, Edward Meir, an analyst at MF Global, said energy's "uninspiring fundamentals" will likely "take a turn for the worse in the aftermath of the OPEC meeting, where poor compliance rates will be more front and center."
OPEC said in an August report that member countries raised July production for a fourth month. OPEC's compliance with mandated output cuts ticked below the 70% mark for the first month since January, according to a MarketWatch calculation. Read related story.
OPEC announced production cuts of 4.2 million barrels a day last year. The compliance rate had hit 83% in March but has since been falling every month.
In currencies trading, the dollar index (DXY 76.86, -0.46, -0.60%) fell 0.6% to 76.853. A weaker greenback tends to push up dollar-denominated oil prices.
Also in energy trading, October reformulated gasoline gained 1.73 cents, or 1%, to $1.8462 a gallon and October heating oil rose 3.9 cents, or 2.2%, to $1.8215 a gallon.
October natural gas gained 15.3 cents, or 5.5%, to $2.96 per million British thermal units.
The United States Oil Fund (USO 37.40, +0.46, +1.25%) rose 1.3%, and the Untied States Natural Gas Fund (UNG 10.79, +0.51, +4.91%) advanced 4.8%.
