Oil above $70 in broad market rally

Prices also drew support from OPEC's decision to bring its emergency meeting forward to next week, which has raised expectations of a supply cut.

 

U.S. crude for November delivery rose $1.13 to $70.98 a barrel by 0950 GMT. It touched a low of $68.57 on Thursday, its lowest since June last year.

 

London Brent crude gained 69 cents to $68.53.

 

"The market is up in line with other asset classes," said Thomas Stenvoll at UBS.

 

"Oil is dependent on strength in the economy but in order to have a sustainable rally we need to have proof that it has really improved or at least it is not collapsing," he said. "And right now we are not getting that proof."

 

Analysts said oil traders were also betting that the Organization of the Petroleum Exporting Countries (OPEC) would reduce supply to support prices when it meets next week.

 

The producer group said on Thursday it had brought forward to Friday next week an emergency meeting to discuss the impact of global recession on oil markets.

 

Qatar's Oil Minister Abdullah al-Attiyah said he expected OPEC to cut oil production by one million barrels per day (bpd) or more at the meeting.

 

Nigerian Oil Minister Odein Ajumogobia said the meeting was an opportunity to consider options regarding the world oil price but that no course of action had yet been proposed.

 

Oil prices have fallen more than 50 percent from their peak above $147 a barrel hit just three months ago, depressed partly by falls in demand in the United States and other industrial countries.

 

Crude oil inventories in the United States rose 5.6 million barrels last week, far exceeding analysts' expectation of a 1.9-million-barrel increase, as demand in the world's top consumer continued to fall, the U.S. Energy Information Administration reported.

 

Hurricane Omar weakened to a tropical storm in the Atlantic on Thursday after threading its way through the small islands of the northeastern Caribbean, causing relatively little damage and posing no threat to the United States or any other land area, the U.S. National Hurricane Center said.