Oct. 13 (Bloomberg) -- Natural gas in New York rebounded as governments in Europe, the U.S. and Asia took measures to support banks and restore confidence in economies across the world.

Natural gas, crude oil and other commodities advanced after the U.K. provided $64 billion of capital to its banks and the U.S. Federal Reserve said it will lend unlimited dollar funds to financial institutions.

``You're seeing rallies across the globe,'' said Chris Jarvis, president of Caprock Risk Management LLC in Hampton Falls, New Hampshire. ``We're starting to see a more concentrated effort globally on the part of the banks.''

Natural gas for November delivery rose 15.3 cents, or 2.3 percent, to settle at $6.688 per million British thermal units on the New York Mercantile Exchange. Futures have dropped 51 percent from a 30-month intraday high of $13.694 on July 2. The fuel plunged 11 percent last week.

``We were just really oversold last week and you're seeing a little bounce,'' said Larry Young, a senior trader at Infinity Futures Inc. in Chicago. ``We're up across the board in the entire complex.''

Crude oil for November delivery advanced $3.49, or 4.5 percent, to settle at $81.19 a barrel in New York. Oil has fallen 45 percent since reaching a record $147.27 in July.

``We're getting some people that have been patiently waiting who are starting to get back into commodities,'' said Carl Neill, an energy analyst at Risk Management Inc. in Chicago. ``We may have seen the worst of the worst of this sell-off.''

Stocks Rally

Stocks rallied worldwide as the MSCI World Index rebounded from its worst week on record, and the euro rose the most in three weeks against the dollar after the banks worked to boost the financial system.

``The dollar's pretty weak,'' said Jarvis. ``The European situation looks better, so you're seeing the euro scream. Plus, you can throw into the mix that Morgan Stanley got a vote of confidence from the Japanese.''

Morgan Stanley climbed as much as 97 percent in New York trading after the firm sealed its $9 billion investment from Mitsubishi UFJ Financial Group Inc.

The Standard & Poor's 500 Index rose 11.6 percent to 1,003.35 in New York. The index tumbled 18 percent last week and is down 32 percent this year. The Dow Jones Industrial Average climbed 11.1 percent.

``If you said we're going through a deep recession, that signals lower demand for natural gas,'' said George Hopley, an analyst at Barclay's Capital in New York. ``If the S&P is rallying, then that's bullish for natural gas. There definitely seems to be `light at the end of the tunnel' feeling in all markets today.''

Commodities Follow

As financial stocks rebound worldwide, commodities should follow, Jarvis said.

Natural gas today rose the most since Oct. 1, when it jumped 3.9 percent.

``That's a function of the global equity markets recovering,'' said Gordy Elliott, a director at FC Stone LLC in St. Louis Park, Minnesota. ``Maybe we'll have some demand for petrochemicals.''

Industrial and commercial demand together accounted for 9.64 trillion cubic feet, or 42 percent, of gas consumption in the U.S. last year, according to the Energy Department.

Current natural gas prices are a bargain so close to the winter heating season, Neill said.

``Gas is cheap and a lot of end-users are interested at these levels,'' Neill said.

The cold-weather season runs from November to March when demand for natural gas outstrips production, requiring utilities and other large users to draw on supplies put into storage during the U.S. summer.

To contact the reporters on this story: Mario Parker in Chicago at mparker22@bloomberg.net.

Last Updated: October 13, 2008 16:42 EDT