* Oil rebounds from a 16-month low
* Analysts expect OPEC to cut by 1-1.5 million bpd
* Wall St. turns up on bargain hunting
(Recasts, updates prices; changes dateline from LONDON)
By Gene Ramos
NEW YORK, Oct 23 (Reuters) - Oil prices rose on Thursday on
expectations that OPEC will cut output at an emergency meeting
Friday, after slowing demand and the growing financial crisis
sent prices crashing from record highs above $147 a barrel.
Members of the Organization of Petroleum Exporting
Countries gathering in Vienna ahead of their Friday meeting
pointed toward a supply cut, with Iran suggesting a reduction
of 2 million barrels per day cut and Qatar proposing a cut of
at least 1 million bpd. []
Analysts polled by Reuters expected the cartel to reduce
output by 1 million to 1.5 million bpd. [] Top
exporter Saudi Arabia has said only that the oil price would be
determined by the market. []
U.S. crude <CLc1> rose $1.51 to $68.26 a barrel by 12:50
p.m. EDT (1644 GMT). London Brent crude <LCOc1> gained $1.92 to
to $66.44 a barrel.
The slumping global economy has damped oil demand in large
consumer nations, such as the United States, helping push
prices down from the record $147.27 a barrel struck in July.
U.S. crude fell on Wednesday to its lowest level in 16
months and settled 7 percent lower after U.S. data showed crude
and product inventories swelling due to weaker demand. []
The sharp drop came amid a broader sell-off on global
markets rattled by fear that economies were heading into
recession.
"Right now, crude futures are moving with the stock market,
although, obviously, people are expecting OPEC's meeting to
decide on a production cut," said Phil Flynn, an analyst at
Alaron Trading.
Bleak outlooks from world carmakers and a barrage of job
cuts by major U.S. companies, including Chrysler and Xerox,
deepened fears of an extended global recession and kept market
nerves on edge on Thursday. []
U.S. stocks, however, clawed back from 5-year lows in
choppy action as investors sought bargains after the market's
latest plunge. []
PRODUCTION CUTS
OPEC President Chakib Khelil of Algeria said the producer
group could consider cutting back output in several steps.
"I think that is a solution not to be excluded," Khelil
told reporters. He also did not rule out the possibility the
group could also cut back production with immediate effect.
"I think we will have both solutions," Khelil said.
Khelil said he favored OPEC's reference crude oil basket
price at $90 to ensure energy projects go ahead. The basket
price stood at $60.82 on Wednesday.
Some analysts, however, pointed out that the slowing global
economy could limit the impact from any oil supply cuts OPEC
might agree on to prop up prices.
Total oil product demand in the United States, the world's
top oil consumer, fell 8.5 percent in the past four weeks from
a year earlier, according to data released on Wednesday.
"It illustrates the immense size of the demand 'hole' OPEC
has to dig itself out of, if it is to successfully recalibrate
supply with the new demand parameters," MF Global said.
(Additional reporting by Fayen Wong in Perth and Ikuko Kao in
London; Editing by Walter Bagley)
