Oil rose towards $64 today, tracking a recovery in European and Asian stock markets as dealers returned to buy beaten-down shares.
Traders were also watching closely for any evidence OPEC was implementing its decision last week to cut output. Officials from the Organization of the Petroleum Exporting Countries said they would consider further reductions unless the oil market strengthened.
US light crude for December delivery rose 63 cents to $63.85 by 9.50am.
London Brent crude gained 33 cents to $61.74. "I think oil is up in line with stock markets and the possibility of deeper OPEC production cuts, whether this will have an impact will depend on who is cutting and by how much," said Christopher Bellew of Bache Commodities.
European equities rose today, helped by a late surge in Asia and a jump in shares of heavyweight oil group BP after its third-quarter earnings beat forecasts.
The credit crisis, which began with failing U.S. mortgages, has widened into a world-wide rout as investors have dumped stocks and commodities, shunned higher-risk emerging markets and sought out the safest government bonds and currencies.
Global economic turmoil has already had a major impact on fuel consumption and some analysts have predicted $50 a barrel - widely seen as the cash cost of production for many newer oil projects - is possible in the short term.
US crude has already dropped by nearly 60 per cent from a record above $147 a barrel in July to a low of $61.30, its weakest for 17 months.
OPEC's decision last week to cut 1.5 million barrels per day of output has done little so far to stem oil's fall.
Libya's most senior oil official said on Tuesday OPEC might need to cut output again and the group's Secretary said it could decide to hold another meeting before its next scheduled talks in December.
Reuters