* Oil reverses losses, rises above $68 as Asian stocks rise
* OPEC president urges members to cut, says Saudi key
* Iran latest to cut export volumes after OPEC agreement
(Adds dollar movement)
By Fayen Wong
PERTH, Nov 3 (Reuters) - Oil rose above $68 a barrel on
Monday, reversing earlier losses of more than $1, as Asian
stock markets climbed on signs of improvement in credit markets
and the dollar steadied, stiffening investor confidence.
Analysts said traders would now be looking for signs that
OPEC kingpin Saudi Arabia was cutting back its crude
production, in line with the cartel's agreement last month to
reduce output by 1.5 million barrels per day (bpd).
U.S. crude <CLc1> rose 44 cents to $68.25 a barrel by 0139
GMT, after falling as much as $1.13. London Brent crude <LCOc1>
was down 43 cents at $65.75.
"We're now seeing a more positive tide in stock markets,
which is a good indication for crude oil markets and that's
helping to stop the downward momentum in oil prices," said Toby
Hassall, chief analyst at Commodities Warrants Australia.
"But the dominating theme continues to be a weak demand
outlook, and despite the short term price gains, we're not
likely to see any real improvement to outlook in the near
term."
Asian stocks rose on Monday, after Wall Street ended a
turbulent October on a solid note.
Singapore's Straits Times Index <.FTSTI> rose over 4
percent in early trade, Australia's S&P/ASX 200 Index was up
2.6 percent, while South Korea's shares were steady after
paring earlier gains up to 4 percent.
The U.S. dollar steadied after recording its biggest
monthly gain in more than 17 years in October, with investors
bracing for another round of interest rate cuts this week by
the world's major central banks.
The European Central Bank, the Bank of England and the
Reserve Bank of Australia are all set to lower rates to support
their struggling economies against the threat of recession.
U.S. oil fell more than 32 percent in October, the steepest
monthly decline ever as global demand slows.
In three months, oil has wiped out gains that took more
than a year to build, down more than half since they struck a
record $147.27 a barrel in July as a raft of poor economic data
added pressure from weak demand reports in the U.S. and other
key consumer nations.
OPEC members have no choice but to implement agreed output
cuts and inform customers of the reductions if they want a
stable oil price between $70-$90 a barrel, OPEC President
Chakib Khelil said on Sunday.
Khelil said Saudi Arabia was the key to the success of the
reductions, and if the world's biggest oil exporter took its
time over the operation the oil price could be affected.
[]
Other OPEC members have begun to notify customers that they
would reduce their crude oil sales in line with an OPEC
decision to cut output.
Iran's oil minister said on Saturday it had informed
customer France's Total <TOTF.PA> of an oil sales cut
[], while Kuwait has notified term customers in
Asia it would reduce their crude oil supplies by 5 percent from
November. []
Earlier last week, Nigeria and the United Arab Emirates
told customers they would receive less oil, but top exporter
Saudi Arabia has yet to inform customers of any fresh curbs.
Oil's sharp downturn has spurred some OPEC members to call
for additional supply reductions to arrest a continued slide in
oil prices.
Iran's Oil Minister Gholamhossein Nozari said on Saturday
that OPEC will cut output further, if needed, to achieve
stability in the oil market [], adding to comments
by Venezuelan oil minister last week that OPEC should cut oil
output by another 1 million bpd by December and should set a
minimum price target of $70 or $80 a barrel.
Crude oil speculators on the New York Mercantile Exchange
shifted to net short positions in the week Oct. 28, the U.S.
Commodity Futures Trading Commissions reported on Friday.
[]
(Reporting by Fayen Wong; Editing by Kim Coghill)
