* Crude extends gains on government rescue plans
* Asian equity markets bounce after Wall St surge
* U.S. weekly oil stocks seen higher
(Updates prices, adds Bernanke comments)
SINGAPORE, Oct 14 (Reuters) - Oil rose more than $2 on
Tuesday amid a broad-based commodities rally, extending a 4
percent gain from the previous session as government moves to
rescue banks raised hopes for an economic recovery.
Global markets jumped, with Wall Street staging its biggest
one-day gain ever and Japan's Nikkei <> up more than 13
percent, after governments around the world bet hundreds of
billions of dollars to shore up ailing banks.
U.S crude <CLc1> gained $1.75 to $82.94 a barrel by 0504
GMT after climbing by more than $2 earlier, while London Brent
crude <LCOc1> rose $1.35 to $78.81, as concerns over the impact
of the financial crisis on oil demand eased.
Oil prices had fallen to their lowest level since Sept. 10,
2007 on Friday as investors fled into safer assets.
"The current bounce is due to expectations that the economy
will recover," said Tetsu Emori, fund manager at Astmax Co Ltd.
The U.S. government is set to buy $250 billion in equity
stakes in banks, a source briefed on the situation said, while
Britain, Germany, France and other European countries pledged
more than 1 trillion euros ($1.36 trillion) for bank guarantees
and equity stakes. [] []
Federal Reserve Chairman Ben Bernanke said in an editorial
in the Wall Street Journal that new U.S. measures to aid the
financial system would help restore normality to markets,
without giving details of the plan, to be announced later on
Tuesday. []
The bailout schemes saw the U.S. dollar fall against the
euro <EUR=>, further boosting dollar-denominated oil prices.
Investors rushed into oil and other commodities this year
as a hedge against the weak dollar and inflation, before
worries about slowing demand in the United States and other
developed countries knocked crude off its record above $147 set
in July.
Commodities bull Goldman Sachs on Monday cut its year-end
U.S. crude oil target to $70 a barrel, down from a previous
forecast of $115, slashed its average 2009 forecast by a third
to $86, and warned that prices could hit $50 if the current
financial crisis worsened. []
With the retreat in crude prices, some members of the
Organization of the Petroleum Exporting Countries (OPEC) had
called for a cut in production levels when the cartel holds an
emergency meeting on Nov. 18.
Iraq's Oil Minister Hussain al-Shahristani said on Monday
that OPEC would consider reducing output if the world does not
need its oil. []
Top exporter Saudi Arabia cut November supplies to one
major European refiner, according to a trade source, but told
major Asian refiners on Monday that shipments would not be
changed. []
As global markets cheered the government bailouts, oil
traders will also look at the weekly U.S. petroleum inventory
data to be released on Thursday.
Preliminary analyst forecasts have called for a 2.4 million
barrel build in crude stocks, a 3.2 million barrel increase in
gasoline supplies and a 0.8 million barrel rise in distillates.
[]
(Reporting by Chua Baizhen, Editing by Clarence Fernandez)
