Global stocks, oil rally on hopes of crude output cut
By Richard Leong
NEW YORK (Reuters) - Stock and oil prices rebounded in choppy trading on Tuesday on hopes oil producers will cut output to address the supply glut that has punished equity markets and pushed crude values to 12-year lows.
Bets that oil exporters could reduce production helped scale back some demand for low-risk yen and U.S. and German government debt, but it remained unclear whether a deal could be reached and would be enough to soothe jittery investors.
"This is a schizophrenic market. Big up days, big down days. No real direction," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
Investors also awaited more clues to whether the Federal Reserve and other central banks will help stabilize markets that have been roiled partly due to worries about weakening economic growth in China.
The U.S. central bank is expected to leave interest rates unchanged after its two-day policy meeting that began Tuesday and signal it may not raise rates until mid-2016 at the earliest.
Top OPEC and Russian oil industry officials stepped up vague talk on Monday of possible joint action to remedy one of the worst supply gluts in decades. Others, including Kuwait, said they doubt it will happen as long as others are increasing their output.
Brent crude futures gained $1.30, or 4.26 percent, at $31.80 a barrel and U.S. crude climbed $1.11, or 3.66 percent, at $31.45. Both retreated from their strongest levels before the day's close.
The oil rebound revived some appetite for stocks. Continued...