Oil rises as OPEC meets; dollar near one-month low

Crude oil prices rose on Friday as OPEC ministers met in Vienna, while the dollar hovered near one-month lows a day after staging its largest one-day fall in nearly seven years.

OPEC was not expected to change its unchanged output policy, but nervousness among traders and investors ran high.

Brent crude oil futures were last up 65 cents at $44.49 a barrel at 1100 GMT, having fallen earlier this week to a low of $42.43, within cents of August's 6-1/2 year trough.

US crude futures were up 55 cents at $41.63.

In the last few weeks, investors have run up big bearish bets, or short positions, betting on a fall in the price of crude oil, which could be rapidly unwound if OPEC were to give any signal that it might adjust its stance on supply.

"The markets are sitting on their hands at the moment," Saxo Bank general manager Ole Hansen said.

The dollar rose, which would ordinarily depress oil prices as this strength can encourage non-U.S. investors in crude to sell their holdings in exchange for a higher profit in their own currency.

But Thursday's 2-percent slide in the greenback, triggered by a surging euro, left the dollar near its weakest in a month, ahead of the monthly U.S. jobs report that could cement expectations for the first U.S. rate rise in nearly a decade from the Federal Reserve this month.

In Vienna, OPEC's poorer members have been piling pressure on their richer counterparts led by Saudi Arabia to cut supply, but Riyadh and its allies appeared on Friday to be ready to stick to their strategy of protecting market share.

"What OPEC have on their side is the market is in quite a bearish mode, so there are quite a few shorts out there ... if we see anything that resembles a move towards stabilising the the price, then we could see (oil) move 20 or 25 percent higher within a very short period of time" he said.

Saudi Arabian oil minister Ali al-Naimi said ahead of the meeting growing global demand could absorb an expected jump in Iranian production next year.

On the demand side, China is likely to double its strategic crude oil purchases next year to take advantage of a more than a 60 percent fall in oil prices since June 2014.

Beijing will add 70-90 million barrels of crude to storage tanks in 2016 to build up its strategic petroleum reserves (SPR), according to most respondents in a poll of five analysts and data collected by Reuters analysts.