Oil prices rose as much as 2 percent on Tuesday, driven by a weak dollar, and expectations that U.S. crude supplies could have fallen again last week for a fifth straight week.
The likelihood of high global supplies from OPEC's lack of will to cut output when it meets this week remained a factor for the market, but did not immediately impact prices.
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Ministers from the Organization of the Petroleum Exporting Countries, responsible for more than a third of the world's crude output, meet in Vienna on Friday to decide on production policy for the next six months.
The group has been producing up to 2 million barrels per day more than needed this year, although analysts expect the market to eventually balance from higher demand.
While a no OPEC cut is principally bearish for oil, the market was propped up on Tuesday by a weaker dollar that made crude prices, denominated in the greenback, more affordable to holders of the euro and other currencies. The euro was up its most against the dollar since mid-March on bets that Greece would reach a deal with its creditors.
Prices were also underpinned by expectations the U.S. government will announce on Wednesday a fifth straight weekly draw in crude stocks. A Reuters poll forecast that crude stocks fell 2 million barrels last week ahead of estimates at 4:30 p.m. (2030 GMT) from industry group American Petroleum Institute.
"It's a dollar driven day, with as much expectations riding on a continued draw in crude stocks," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Brent crude was up 84 cents at $65.72 a barrel by 12:49 p.m. EDT.
U.S. crude rose $1.27 to $61.47.
Ali al-Naimim, oil minister of Saudi Arabia, OPEC's most influential member, expects global oil demand to increase in the second half and supply to decrease, a sign the kingdom's strategy of defending market share was working.
Several banks and analysts, including Morgan Stanley, have suggested OPEC could raise its production target, acknowledging that it has been producing more than planned over the last few months. But most expect no change.
"The gulf between the member countries remains extremely wide, and without a contribution from everyone ... Saudi Arabia will not reduce production," said Amrita Sen, chief oil analyst at Energy Aspects.
(By Barani Krishnan; Additional reporting by Christopher Johnson in London and Henning Gloystein in Singapore. Editing by Jane Merriman and Andre Grenon)