* OPEC mulls boosting production for 1st time in 2 years
* Euro slips for 2nd day on euro zone debt concerns
* Greek 10-year yields hit euro-era high
* U.S. stocks rise on oil price relief
(Updates with US markets open; changes byline, dateline,
previous LONDON)
By Walter Brandimarte
NEW YORK, March 8 (Reuters) - Oil prices fell on Tuesday as
OPEC considered boosting production for the first time in more
than two years, while the euro slipped for the second day on
renewed euro zone debt worries.
U.S. stocks rose as investors greeted the fall in oil
prices with relief, but a drop in base metals, such as copper,
drove shares of miners lower, weighing on European equity
markets.
The recovery in stocks appeared tentative as investors
feared that unrest in Libya and the Middle East could still
drive oil prices up, one day after they hit a 2-1/2-year high.
An official oil output increase by the Organization of the
Petroleum Exporting Countries would signal the group's
determination to cap prices, but continued violence in Libya
left investors jittery.
OPEC oil producers are consulting about a supply boost,
Kuwait's oil minister said, but many in the group remain
skeptical. []
"At the moment, I think we just remain nervous -- the
situation in the Middle East is still fluid," said Frank Lesh,
a futures analyst and broker at FuturePath Trading LLC in
Chicago. "We'd like to see a little more clarity there, and we
certainly don't have that."
Brent crude <LCOc1> prices dropped 1.45 percent to $113.37
per barrel, while U.S. light crude futures <CLc1> were 0.6
percent lower at $104.80.
The three major U.S. stock indexes traded higher after
starting the session flat.
The Dow Jones industrial average <> was up 64.56
points, or 0.53 percent, at 12,154.59, while the Standard &
Poor's 500 Index <.SPX> rose 6.54 points, or 0.50 percent, at
1,316.67. The Nasdaq Composite Index <> gained 12.61
points, or 0.46 percent, at 2,758.24.
In Europe, the FTSEurofirst 300 <> index of top
shares was little changed at 1,144.47 points, after seesawing
between positive and negative.
GREEK YIELDS AT RECORD HIGH
The euro fell against the dollar as concerns about the debt
situation of peripheral euro zone countries outweighed
expectations of an interest rate hike by the European Central
Bank next month.
Concerns about Europe's debt problems have been on the rise
since Moody's cut Greece's credit ratings by three notches on
Monday, signaling that more downgrades are on the way.
Greece's borrowing costs spiked on Tuesday, with yields
paid by 10-year government bonds <GR10YT=TWEB> climbing to
12.946 percent, their highest since the launch of the euro
currency.
The euro <EUR=> fell 0.59 percent to $1.389. It had climbed
above $1.40 after ECB president Jean-Claude Trichet said last
week that euro-zone interest rates could rise as early as next
month.
"The problem with the interest rate driven trade and
Trichet's hawkish comments is that you have to see the other
issues behind it," said John McCarthy, director of foreign
exchange at ING Capital Markets in New York. "Higher rates will
be devastating on the peripheral countries."
(Additional reporting by Chuck Mikolajczak, Nick Olivari,
Brenda Goh and William James; Editing by Padraic Cassidy)
