Oil Rises Above $64 As Stock Markets Rally

U.S. light crude for December delivery rose $1.19 to $64.41 by 1112 GMT.

Oil rose above $64 on Tuesday, tracking a recovery in European and Asian stock markets as dealers returned to buy beaten-down shares.

Traders were also watching closely for any evidence OPEC was implementing its decision last week to cut output.

Officials from the Organization of the Petroleum Exporting Countries said they would consider further reductions unless the oil market strengthened.

U.S. light crude for December delivery rose $1.19 to $64.41 by 1112 GMT.

London Brent crude gained 78 cents to $62.19. "I think oil is up in line with stock markets and the possibility of deeper OPEC production cuts, whether this will have an impact will depend on who is cutting and by how much," said Christopher Bellew of Bache Commodities.

European equities rose on Tuesday, helped by a late surge in Asia and a jump in shares of heavyweight oil group BP after its third-quarter earnings beat forecasts.

The credit crisis, which began with failing U.S. mortgages, has widened into a worldwide rout as investors have dumped stocks and commodities, shunned higher-risk emerging markets and sought out the safest government bonds and currencies.

Global economic turmoil has already had a major impact on fuel consumption and some analysts have predicted $50 a barrel -- widely seen as the cash cost of production for many newer oil projects -- is possible in the short term.

U.S. crude has already dropped by nearly 60 percent from a record above $147 a barrel in July to a low of $61.30 on Monday, its weakest for 17 months.

OPEC's announcement last week it would cut output by 1.5 million barrels per day has done little yet to stem oil's fall.

Libya's most senior oil official said on Tuesday OPEC might need to cut output again and the group's secretary general said it could decide to hold another meeting before its next scheduled talks in December.

For the next indication of the balance of supply and demand, traders were looking ahead to U.S. fuel stocks data to be released on Wednesday.

Crude inventories were expected to have risen for the fifth week in a row last week following higher imports, a preliminary Reuters poll of eight industry analysts showed.