Crude Oil Rises as U.S. Equities Climb, OPEC Considers Meeting

By Christian Schmollinger

Oct. 29 (Bloomberg) -- Crude oil rose for the first time in four days after U.S. stocks surged and OPEC ministers said the group may meet again before December to consider another cut in production.

The Standard & Poor's 500 Index advanced 11 percent and the Dow Jones Industrial Average posted its second-best points gain in 23 years. OPEC's secretary-general said the group may call a new meeting if prices fail to react to the 1.5 million-barrel-a- day output reduction it announced last week.

``People are looking for any sign of a recovery in demand,'' said Tetsu Emori, a fund manager with Astmax Ltd. in Tokyo, Japan's biggest commodities asset manager. ``Last night's S&P gain was very positive so it's easy for people to latch onto that story and push the price higher.''

Crude oil for December delivery rose as much as $3.98, or 6.3 percent, to $66.71 a barrel on the New York Mercantile Exchange. It was at $65.13 a barrel at 9:14 a.m. Singapore time. Prices have tumbled 56 percent since reaching a record $147.27 on July 11.

Yesterday, futures fell 49 cents, or 0.8 percent, to $62.73 a barrel, the lowest close since May 16, 2007, after a Conference Board report showed the lowest confidence reading since records began in 1967. They rose 1.8 percent, along with U.S. stocks, in after-hours electronic trading. Floor trading in New York ends at 2:30 p.m., and electronic trading ceases at 5:15 p.m.

U.S. stocks rallied as the cheapest valuations in 23 years lured investors and increased commercial-paper sales signaled credit markets are thawing. The Dow climbed 889.35, or 11 percent, to 9,065.12.

Supply Declines

Global crude-oil output is falling faster than expected, leaving producers struggling to meet demand without extra investment, the Financial Times said, citing a draft of an International Energy Agency report.

Annual production is set to drop by 9.1 percent in the absence of additional investment, according to the draft of the agency's World Energy Outlook obtained by the newspaper, the FT reported. Even with investment, output will slide by 6.4 percent a year, it said.

The shortfall will become more acute as prices fall and investment decisions are delayed, the newspaper said. The IEA forecasts that the rising consumption of China, India and other developing nations requires investments of $360 billion a year until 2030, it said.

OPEC Considers Meeting

The Organization of Petroleum Exporting Countries' decision last week to trim production for the first time in almost two years failed to stop prices falling yesterday.

``If circumstances dictate we have another meeting, of course we will meet,'' OPEC Secretary-General Abdalla el-Badri said at the Oil & Money conference in London. He said he expects a market response to last week's output cut after about a week.

Shokri Ghanem, chairman of Libya's National Oil Corp., echoed el-Badri's comments, saying he's watching the market to see whether it's deteriorating or stabilizing.

The U.S. Energy Department will probably report today that U.S. supplies of crude oil, gasoline and distillate fuel, a category that includes heating oil and diesel, rose last week, a Bloomberg News survey showed.

Brent crude oil for December settlement rose as much as $3.90, or 6.5 percent, to $64.19 a barrel on London's ICE Futures Europe exchange. It was at $62.74 a barrel at 9:16 a.m. Singapore time. The contract yesterday dropped $1.12, or 1.8 percent, to settle at $60.29 a barrel, the lowest settlement since March 20, 2007.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.