(Recasts, changes dateline, PVS LOS ANGELES, updates prices)
* Oil up as much as 6 pct at over $66 after stock mkts
rally
* Eyes interest rates cuts in Japan, U.S. to revive
economies
* Weekly U.S. crude, products stocks expected to rise again
By Maryelle Demongeot
SINGAPORE, Oct 29 (Reuters) - Oil jumped as much as 6
percent on Wednesday, ending a three-day losing streak, after
U.S. stock indices staged their second-biggest point gain ever,
helping draw some investors back into beaten-down risk assets.
Asian stocks markets kept up the positive momentum, opening
sharply higher on signals that the Bank of Japan might cut
interest rates at a policy-setting meeting later this week,
following an expected Federal Reserve cut later on Wednesday
that should ease the flow of funds and help revive flagging
economies.
U.S. light crude for December delivery <CLc1>, which
earlier surged to a session high of $66.71, was up $2.32 at
$65.05 a barrel by 0106 GMT. Prices had slumped by $5 over the
past three sessions, settling on Tuesday at their lowest in 17
months.
London Brent crude <LCOc1> rose $2.69 a barrel to $62.98.
"This gain is all equities related. The crude market was
playing catch up," said U.S.-based analyst Jim Ritterbusch of
Ritterbusch & Associates in Galena, Illinois.
"Crude was able to shrug off a 200- to 300-point gain in
the Dow but when it shot up 900-points-plus, it was just too
hard to ignore," he said.
In a late-session rally after the normal session for U.S.
oil markets had shut, the Dow Jones industrial average <>
and the S&P 500 <.SPX> both ended nearly 11 percent higher,
helped by a late drop in the yen on hopes of a Japanese rate
cut. []
Oil and other commodities have tracked stock markets
closely in recent months as investors divide the financial
world into risky assets and safe havens, switching from one to
the other amid volatile swings brought on by the worst
financial crisis in 80 years.
"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. (U.S.) unemployment is going to go up. There are all
kinds of pressure points and various economic signals on the
horizon," Antoine Halff, an analyst at Newedge Group, said.
Even an emergency OPEC production cut -- and recent
comments suggesting another one could be made before its
December meeting -- has failed to revive oil prices, which have
fallen by about 55 percent since their early July record high
of above $147 a barrel.
Instead, oil traders have focused on the rapid
deterioration in consumer demand across the world, particularly
in top consumer the United States, where U.S. gasoline demand
fell by 6.4 percent last week versus year-ago levels, data from
MasterCard Advisors released on Tuesday showed. []
Potentially adding further pressure, U.S. government data
due at 1435 GMT is expected to show a rise of 1.4 million
barrels in crude stocks last week, a Reuters poll showed.
[]
Distillate stocks are seen up 800,000 barrels, while
analysts forecast a rise of 1.2 million barrels in gasoline
stocks.
OPEC ministers will take further steps to prop up the oil
market and could call another meeting before the group's next
scheduled talks in December, officials said on Tuesday, after
the group's decision last week to cut output by 1.5 million
barrels per day failed to lift prices. []
(Additional reporting by Bernie Woodall; Editing by Jonathan
Leff and Ben Tan)
