Oct. 20 (Bloomberg) -- Crude oil rose more than $2 a barrel on signs that the Organization of Petroleum Exporting Countries may cut output to halt a 50 percent drop in prices since July.

OPEC may pare production by 1 million to 2 million barrels a day in stages at an Oct. 24 meeting to stabilize prices, said Chakib Khelil, the group's president. Deutsche Bank AG lowered its 2009 crude-oil price estimate by 35 percent to $60 a barrel, citing the possibility of a ``major world recession.''

``The main reason for the rise is the impending OPEC production cut,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``It's not a question of if, but of how much they will cut production at Friday's meeting.''

Crude oil for November delivery rose $2.40, or 3.3 percent, to settle at $74.25 a barrel at 2:45 p.m. on the New York Mercantile Exchange. Prices are down 16 percent from a year ago.

``Oil is following the equity markets higher,'' Barakat said. ``The fate of energy markets has been very closely tied to the Dow Jones Industrial Average lately.''

U.S. stocks rose, adding to the Dow Jones Industrial Average's best weekly gain in five years, after Halliburton Co.'s profit topped estimates and Federal Reserve Chairman Ben S. Bernanke endorsed an economic stimulus package.

Emergency Meeting

OPEC, supplier of about 40 percent of the world's oil, brought forward to this week a Vienna meeting planned for November to discuss output levels.

``OPEC is the focus,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``We are all waiting to see what OPEC does on Friday. A 1 or 1.5 million-barrel cut looks most likely, but as much as 3 million barrels is a possibility, although done in stages.''

While there's a consensus among the group's members to cut output, there's no agreement on the size of the reduction, Khelil, who is also Algeria's oil minister, said in an interview on Algerian television yesterday.

``There should be more than 1 million,'' Shokri Ghanem, chairman of Libya's National Oil Corp., said in a telephone interview today. ``I can't say how much, we will leave it to discussion.''

Qatari Oil Minister Abdullah bin Hamad al-Attiyah told Al Jazeera TV the cut will probably be 1 million barrels a day. Saudi Arabia, which dominates OPEC proceedings as the group's largest producer, has yet to comment on its intentions.

Goldman Outlook

Goldman Sachs Group Inc. and Merrill Lynch & Co. said a 1 million-barrel cut is possible. Oil may fall below $60 a barrel if OPEC limits the cut to 1 million barrels a day, Goldman analysts said in a report dated Oct. 17. Merrill analysts said OPEC may trim supplies by 2.4 million barrels a day over 12 months if economic conditions deteriorate.

OPEC's 13 members produced 32.2 million barrels a day in September, according to a Bloomberg News survey of analysts and producers.

``The West is going to be angry because the drop in oil prices has been just about the only positive economic news,'' Fitzpatrick said. ``Falling gasoline prices have been a great help to consumers.''

Regular gasoline, averaged nationwide, declined 3.1 cents to $2.923 a gallon, AAA, the nation's largest motorist organization, said today on its Web site. Pump prices have tumbled 29 percent from the record $4.114 a gallon reached on July 17.

Brent crude oil for December settlement rose $2.43, or 3.5 percent, to settle at $72.03 a barrel on London's ICE Futures Europe exchange.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: October 20, 2008 15:54 EDT