Oil rises on possible OPEC output cut

by Rebekah Kebede

NEW YORK (Reuters) - Oil prices rose over $2 on Tuesday as signs OPEC was considering a supply cut outweighed concerns about the global financial crisis.

U.S. crude settled at $90.06 a barrel, up $2.25, after hitting an eight-month low on Monday as part of a four-day decline.

London Brent settled at $84.66 a barrel, up 98 cents.

"It seems the (OPEC) price hawks are lobbying for a production cut to support prices ... that may have sparked the late session spurt of buying to take us positive on the day," said Tom Knight, a trader at Truman Arnold in Texarkana, Texas.

Oil has plummeted from a record high of $147.27 a barrel in July as high fuel prices and the growing financial crisis slow oil demand in the United States, the world's top consumer, and other industrial nations.

The spread of the credit crisis has intensified gloom about the global economic outlook and weakened prospects for oil demand and prices, and has led some investors to sell off commodities for safer havens.

Oil's recent price drop has caused worry for some members of the Organization of the Petroleum Exporting Countries.

"If this volatility continues, OPEC will have to do something," Shokri Ghanem, chairman of Libya's National Oil Corp, told Reuters by telephone Tuesday.