* Oil gains for third session to near $75/bbl
* OPEC expected to cut output at Friday meeting
* Colder US Northeast weather prop up heating oil (Updates
prices)
By Fayen Wong
PERTH, Oct 21 (Reuters) - Oil edged up to near $75 a barrel
on Tuesday, rising for the third consecutive session, on
expectations that OPEC will cut output this week to lift prices
that have shed half their value in three months.
In addition, forecasts of colder weather in the U.S.
Northeast also supported values.
Signs that the global credit crunch might be easing and
comments by U.S. Federal Reserve Chairman Ben Bernanke urging
more government spending prompted renewed hopes that the worst
of the financial crisis may be over, lending support to oil
prices.
U.S. light crude for November delivery <CLc1> rose 25 cents
to $74.50 a barrel by 0547 GMT, after earlier gaining as much
as $1.17. Prices jumped by $2.40 on Monday.
The market hit a record high of above $147 in mid-July.
London Brent crude <LCOc1> shed 3 cents to $72.00 a barrel
after rising as much as $1.18 earlier.
"All eyes are certainly on the OPEC team and that is the
key short-term driver supporting oil prices," said Victor Shum,
an energy analyst with Purvin & Gertz in Singapore.
"The global equities markets have also performed better on
increased confidence that the credit freeze is beginning to
ease and these are early indications that the macroeconomic
outlook may be better than expected."
Asian stocks opened higher on Tuesday, tracking sharp
rallies in U.S. markets, with Japan's benchmark Nikkei average
<> up 2.6 percent and Australia's S&P/ASX 200 index
<> rising 2.7 percent.
EYES ON OPEC CUT
Still, expectations that the Organization of the Petroleum
Exporting Countries may only make modest output cuts this week
were limiting oil's gains.
An OPEC source told the Saudi-owned al-Hayat newspaper that
the cartel might not need a hefty oil output cut when it meets
on Friday, as others in OPEC talked of a possible cut of more
than a million barrels per day (bpd), perhaps in stages.
While OPEC ministers were expected to cut output at the
emergency meeting in Vienna, a debate on how much oil they
should take off global markets could be intense as they balance
their price needs against risks to a fragile world economy.
The International Energy Agency, which advises
industrialised countries, said an OPEC output cut could prolong
a global economic slowdown. []
Analysts said support for prices also came on forecasts for
colder weather in the U.S. Northeast, the top heating oil
market.
"Oil demand will still pick up even if the U.S. was in the
midst of a recession," Purvin & Gertz's Shum said.
U.S. crude oil inventories probably rose 2.3 million
barrels last week, a preliminary Reuters poll ahead of the U.S.
government oil data due on Wednesday showed. []
The poll also showed forecasts for a 100,000-barrel build
in distillate inventories, which include heating oil and
diesel, and a 2.1 million barrel gain in gasoline supplies.
(Editing by Ramthan Hussain)
