* OPEC members worried by oil price fall
* Oil rebounds after Australia cuts interest rates
* U.S. Federal Reserve to enter commercial paper market
* U.S. cuts world oil demand growth forecast
(Recasts, updates throughout)
by Rebekah Kebede
NEW YORK, Oct 7 (Reuters) - Oil prices rose over $2 on
Tuesday as signs OPEC was considering a supply cut outweighed
concerns about the global financial crisis.
U.S. crude settled at $90.06 a barrel, up $2.25, after
hitting an eight-month low on Monday as part of a four-day
decline.
London Brent settled at $84.66 a barrel, up 98 cents.
"It seems the (OPEC) price hawks are lobbying for a
production cut to support prices ... that may have sparked the
late session spurt of buying to take us positive on the day,"
said Tom Knight, a trader at Truman Arnold in Texarkana,
Texas.
Oil has plummeted from a record high of $147.27 a barrel in
July as high fuel prices and the growing financial crisis slow
oil demand in the United States, the world's top consumer, and
other industrial nations.
The spread of the credit crisis has intensified gloom about
the global economic outlook and weakened prospects for oil
demand and prices, and has led some investors to sell off
commodities for safer havens.
Oil's recent price drop has caused worry for some members
of the Organization of the Petroleum Exporting Countries.
"If this volatility continues, OPEC will have to do
something," Shokri Ghanem, chairman of Libya's National Oil
Corp, told Reuters by telephone Tuesday.[]
"We may sit down together before December," he said.
OPEC's next meeting is in December in Algeria.
Earlier this week, Iran said OPEC may need to cut supply to
prop up prices.
Further support has come from the slow recovery of the U.S.
oil sector from Hurricane Ike. According to the U.S. Mineral
Management Service, 44.8 percent of Gulf of Mexico production
remained shut on Tuesday following the storm. []
The U.S. Energy Information Administration on Tuesday
lowered its forecast for world oil demand growth in 2009 versus
2008. The agency cut its forecast by 140,000 barrels per day
from its estimate published last month.
Analysts also are watching oil demand from China -- which
helped drive oil's rally from $20 a barrel in early 2002 -- for
signs the crisis is hitting consumption in the world's second
largest consumer.
Earlier Tuesday, oil prices received support after the U.S.
Federal Reserve announced that it would start buying the
short-term debt that many companies use to fund day-to-day
operations in a move to restore credit flows. []
An Australia cut rate cut also raised hopes that other
countries would follow suit to bolster economic growth, which
would support demand for oil. []
But the moves failed to stem fears in the U.S. financial
market about fallout from the credit crisis and U.S. stocks
slid on Tuesday. []
Tropical Storm Marco rolled over Mexico's Gulf coast on
Tuesday, but all three of the country's main oil exporting
ports remained open. On Monday, the storm prompted state oil
company Pemex to shut down four offshore production platforms
and close six wells at a natural gas field. []
Traders are also awaiting the release of the U.S. Energy
Information Administration's weekly inventory data on
Wednesday. Analysts polled by Reuters anticipated a
2.3-million-barrel build in crude inventories as imports
rebounded from storm disruptions. []
(Additional reporting by Alex Lawler and Jane Merriman in
London and Annika Breidthardt in Singapore; Editing by
Christian Wiessner)
