* Oil rises alongside global stock markets
* Expectation of OPEC supply cut lends support
(Recasts, updates prices, market activity; changes dateline,
previously LONDON)
NEW YORK, Oct 17 (Reuters) - Oil jumped $2 to $72 on
Friday, spurred by a broader rise across financial markets and
expectations OPEC could cut output at an emergency meeting next
week.
U.S. stocks gained slightly in skittish trade, with the
Nasdaq briefly rising 1 percent as investors hunted for
beaten-down shares, offsetting mounting concerns about a
possible global recession. []
U.S. crude <CLc1> rose $2.22 to $72.07 a barrel by 12:23
p.m. EDT (1623 GMT), a session after after it touched $68.57,
the lowest level since June last year.
London Brent crude <LCOc1> gained $1.60 to $69.44.
"The market is up in line with other asset classes," said
Thomas Stenvoll at UBS.
"Oil is dependent on strength in the economy but in order
to have a sustainable rally we need to have proof that it has
really improved or at least it is not collapsing," he said.
"And right now we are not getting that proof."
U.S. consumer confidence suffered its steepest monthly drop
on record in October and construction starts on new homes fell
to a 17-1/2 year low the previous month, while markets awaited
a meeting between U.S. President George W. Bush and European
leaders. []
The financial crisis and high fuel prices earlier this year
have eroded demand growth in the United States and other big
consumer nations, sending oil in a tailspin from a record over
$147 a barrel.
Analysts said oil traders were betting also that the
Organization of the Petroleum Exporting Countries (OPEC) will
reduce supply to support prices.
The producer group has brought forward an emergency meeting
to Oct. 24 from Nov. 18 to discuss the impact of global
recession on oil markets. []
"It seems very likely that they will agree to cut
production by a million barrels per day, although compliance
could actually become an issue after this round of cuts or
shortly thereafter, if history serves as any guide," Peter
Beutel, analyst at Cameron Hanover, wrote in a research note.
Qatar's Oil Minister Abdullah al-Attiyah said he expected
OPEC to cut oil production by 1 million barrels per day (bpd)
or more at the meeting.
Nigerian Oil Minister Odein Ajumogobia said the meeting was
an opportunity to consider options regarding the world oil
price but that no course of action had been proposed yet.
Oil prices have fallen more than 50 percent from their peak
above $147 a barrel hit just three months ago, depressed partly
by falls in demand in the United States and other industrial
countries as the credit crisis has hit the wider economy.
(Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos
in New York; Joe Brock in London; Editing by David Gregorio)
