(Updates with Brent crude settlement price, analyst's quote)
* Oil rebounds from a 16-month low
* Analysts expect OPEC to cut by 1-1.5 million bpd
* Wall St. falls back on signs of faltering economy
By Gene Ramos
NEW YORK, Oct 23 (Reuters) - Oil rose on Thursday on
expectations OPEC will agree to cut output at an emergency
meeting after slowing demand and the growing financial crisis
sent prices crashing from record highs set this summer.
OPEC members gathering in Vienna ahead of the Friday
meeting have pointed toward a supply cut, with Iran suggesting
a 2-million-barrel-per-day cut and Qatar at least a
1-million-bpd reduction. []
Analysts polled by Reuters anticipate the cartel will
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> settled at $67.84 per barrel, gaining
$1.09. London Brent crude <LCOc1> ended up $1.40 at $65.92.
"Crude prices have rebounded and that could be
short-covering before OPEC's meeting tomorrow," said Mark
Waggoner, president of Excel Futures in Huntington Beach,
California.
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.
On Wall Street on Thursday, U.S. equities gave back earlier
gains as investors remained worried about a faltering economy
and gloomy outlook for corporate profits. []
Earlier, U.S. stocks had clawed back from five-year lows in
choppy action on bargain-hunting after the latest plunge.
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. []
OPEC CUTS
OPEC President Chakib Khelil of Algeria said OPEC could
consider cutting back its oil output in several steps.
"I think that is a solution not to be excluded," Khelil
told reporters.
He said 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 favors 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 Christian Wiessner)
