NEW YORK - Oil surged 9 percent to over $54 a barrel on Monday on expectations that OPEC will cut output again and as stock markets rallied off the U.S. government's plan to rescue U.S. bank Citigroup.
U.S. crude rose $4.57 to settle at $54.50, while Brent crude settled up $4.74 at $53.93.
Oil has tumbled from record highs over $147 per barrel in July -- hitting a 3-1/2 year low of $48.25 on Friday -- as the global economic crisis dented demand in consumer nations.
"Today's move is signaling a shift away from the dominant bear momentum and should begin attracting dip-buyers for a run to $60 this week," said Michael Vassar, analyst at 4castweb.com.
OPEC President Chakib Khelil said a further output cut of more than 1 million barrels per day would be necessary to support the oil market in its current state.
OPEC oil ministers meet for informal talks in Cairo on November 29, though a cut is not expected to be announced until the next full policy meeting in December.
Some OPEC members have called for a further cut in output after a cut on November1 failed to curb the steep price drop.
Venezuela on Sunday said OPEC should cut supply further. Iran made similar remarks on Monday.
U.S. stocks rose on Monday as Washington decided to pump $20 billion into Citigroup, and U.S. President-elect Barack Obama announced his economic leadership team.
Obama named Timothy Geithner as Treasury Secretary and Lawrence Summers as director of the National Economic Council.
The dollar weakened against a basket of other major currencies, also supporting crude. Dollar weakness can increase the appeal of oil and other commodities as an investment.
Apparent oil demand in No. 2 consumer China grew 4.3 percent in October from a year earlier, Reuters calculations from official data showed, gathering pace from a low September but still overshadowed by the gloomy economic outlook.
A Reuters poll of analysts ahead of weekly U.S. government inventory data due out on Wednesday forecast a 400,000 barrel build in crude stocks for the week to November 21, a 1 million barrel draw in distillate stocks, and a 700,000 barrel rise in gasoline inventories.
U.S. crude rose $4.57 to settle at $54.50, while Brent crude settled up $4.74 at $53.93.
Oil has tumbled from record highs over $147 per barrel in July -- hitting a 3-1/2 year low of $48.25 on Friday -- as the global economic crisis dented demand in consumer nations.
"Today's move is signaling a shift away from the dominant bear momentum and should begin attracting dip-buyers for a run to $60 this week," said Michael Vassar, analyst at 4castweb.com.
OPEC President Chakib Khelil said a further output cut of more than 1 million barrels per day would be necessary to support the oil market in its current state.
OPEC oil ministers meet for informal talks in Cairo on November 29, though a cut is not expected to be announced until the next full policy meeting in December.
Some OPEC members have called for a further cut in output after a cut on November1 failed to curb the steep price drop.
Venezuela on Sunday said OPEC should cut supply further. Iran made similar remarks on Monday.
U.S. stocks rose on Monday as Washington decided to pump $20 billion into Citigroup, and U.S. President-elect Barack Obama announced his economic leadership team.
Obama named Timothy Geithner as Treasury Secretary and Lawrence Summers as director of the National Economic Council.
The dollar weakened against a basket of other major currencies, also supporting crude. Dollar weakness can increase the appeal of oil and other commodities as an investment.
Apparent oil demand in No. 2 consumer China grew 4.3 percent in October from a year earlier, Reuters calculations from official data showed, gathering pace from a low September but still overshadowed by the gloomy economic outlook.
A Reuters poll of analysts ahead of weekly U.S. government inventory data due out on Wednesday forecast a 400,000 barrel build in crude stocks for the week to November 21, a 1 million barrel draw in distillate stocks, and a 700,000 barrel rise in gasoline inventories.
