* Oil above $64, tracks stock market rally
* Japan, U.S. expected to cut interest rates
* U.S. crude, products stocks forecast to rise
(Recasts, adds analyst comment, updates prices, previous
SINGAPORE)
By Jane Merriman
LONDON, Oct 29 (Reuters) - Oil firmed well above $64 a
barrel on Wednesday, boosted by a 10 percent surge in U.S. stock
markets that reflected expectations the Federal Reserve was
poised to cut interest rates to spur economic growth.
U.S. light crude for December delivery <CLc1> was up $2.23
at $64.96 a barrel by 1010 GMT.
London Brent crude <LCOc1> was up $2.30 a barrel to $62.59.
"Energy is still very much in the orbit of the U.S. equity
market and has yet to decouple from it," said Edward Meir,
analyst at broker MF Global.
"If equities continue to gain ground, we would not be
surprised to see crude push higher in what could be an eventual
test of the $70 level," he said.
Oil and other commodities have tracked stock markets
closely, using them as a gauge of investor sentiment on the
global economy and demand for raw materials.
European and Asian stock markets rose strongly on hopes the
Bank of Japan and other central banks would follow the U.S. Fed
and cut rates. []
Oil has fallen more than 50 percent from a record peak of
$147.27 in July, as the credit crisis has spilled over into the
real economy dampening demand for oil in industrial countries.
Prices continued to fall last week, despite a cut in
production by the Organization of the Petroleum Exporting
Countries, agreed at an emergency meeting to try to defend
prices.
Investor selling of commodities to move into safe-haven
assets such as government bonds and cash has contributed to the
price slide.
"I don't think we've seen the end of fund liquidation. Also,
there are a lot of bad economic indicators we are just starting
to see. Unemployment (in the U.S.) is going to go up," said
Antoine Halff, an analyst at Newedge Group.
The market is focused on falls in demand across the world,
particularly in top consumer the United States, where gasoline
demand fell by 6.4 percent last week versus year-ago levels,
data from MasterCard Advisors released on Tuesday showed.
U.S. government data due at 1435 GMT is expected to show a
rise of 1.3 million barrels in crude stocks last week, a Reuters
poll showed. []
Distillate stocks are seen up 900,000 barrels while analysts
forecast a rise of 1.2 million barrels in gasoline stocks.
(Additional reporting by Maryelle Demongeot in Singapore;
editing by James Jukwey)
