Oct. 29 (Bloomberg) -- Crude oil rose for the first time in four days, tracking stock prices, on speculation that efforts to unlock global credit markets are beginning to work and possible central bank interest rate cuts may help revive demand.

Crude advanced as much as 6.3 percent after global equities markets rallied. The MSCI World Index added 3 percent to 918.91 in London today. Prices also rose on speculation that a possible interest rate cut by the U.S. Federal Reserve may help an economic recovery in the world's biggest fuel consumer.

``It's all moving on the back of the equity feel-good factor. That's what is driving markets'' said Robert Laughlin, a senior broker with MF Global Ltd. in London. ``The fundamentals of the oil market have gone for the moment.''

Crude oil for December delivery climbed as much as $3.98 to $66.71 a barrel on the New York Mercantile Exchange. It was at $66.15 a barrel at 11:59 a.m. London time. Prices reached a record $147.27 on July 11. Yesterday, futures fell 49 cents, or 0.8 percent, to $62.73 a barrel, the lowest close since May 16, 2007.

U.S. equities rallied yesterday as the cheapest valuations in 23 years lured investors and increased commercial-paper sales signaled credit markets are thawing. The Dow Jones Industrial Average posted its second-best points gain in 23 years, climbing 889.35, or 11 percent, to 9,065.12.

``Given the increase in equity markets, I am surprised the reaction of oil prices wasn't more pronounced,'' said Eugen Weinberg, a commodity analyst at Commerzbank AG in Frankfurt. ``If interest rates are at 1 percent, then there really is a possibility that the Americans will recover from the trough before anyone else.''

Fed Rate

The U.S. Federal Reserve may lower its benchmark interest rate by half a point to 1 percent today, according to the median forecast of economists surveyed by Bloomberg News.

The Organization of Petroleum Exporting Countries will ``probably'' cut crude output quotas a second time to avoid the growth of inventories, Venezuelan Oil Minister Rafael Ramirez said in an interview on state television.

The producer group reduced its production target by 1.5 million barrels a day after meeting Oct. 24. Ramirez said the group would analyze the reaction of the oil market between that cut and a planned Dec. 17 meeting.

``OPEC has to say that if demand and the oil price are still weak then they will look for more cuts,'' said Andy Sommer, an analyst with HSH Nordbank in Hamburg. ``That is not really a surprise.''

Rising Inventories

The U.S. Energy Department will probably report that U.S. supplies of crude oil, gasoline and distillate fuel, a category that includes heating oil and diesel, rose last week, a Bloomberg News survey showed.

Crude oil stockpiles probably climbed 1.55 million barrels in the week ended Oct. 24 from 311.4 million the week before, according to the median of 12 analyst estimates before an Energy Department report.

Brent crude oil for December settlement rose as much as $3.90, or 6.5 percent, to $64.19 a barrel on London's ICE Futures Europe exchange. It traded at $63.51 a barrel at 11:54 a.m. local time. The contract yesterday dropped $1.12, or 1.8 percent, to settle at $60.29 a barrel, the lowest settlement since March 20, 2007.

Gasoline for December delivery gained as much as 9 cents, or 6.4 percent, to $1.4993 a gallon in New York, and last traded at $1.4785 a gallon.

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net

Last Updated: October 29, 2008 08:25 EDT