Oil rallies in Asia

New York's main contract, light sweet crude for delivery in November, rose 2.02 dollars to 83.21 dollars, on top of a 3.49-dollar jump Monday at the New York Mercantile Exchange, where the contract closed at 81.19 dollars.

Brent North Sea crude for November gained 1.51 dollars to 78.97 after rising 3.37 dollars to 77.46 dollars on Monday in London.

Prices had slumped to one-year lows beneath 80 dollars per barrel on Friday during a global equities meltdown that sparked fears of recession that would crimp demand for energy.

"There was a certain amount of panicking going on," said David Johnson, an oil analyst with Macquarie Securities in Hong Kong.

But traders may have felt prices fell too far in the short term, sparking this week's rise while the market reassesses which way to move, Johnson added.

Sucden analyst Nimit Khamar said prices turned higher after world leaders rushed out plans over the weekend to help stabilise their banking systems.

Efforts have intensified this week, with Britain pumping 37 billion pounds (65 billion US dollars) into three struggling banks. Germany and France also unveiled massive rescue packages.

On Tuesday Australia announced a 10.4-billion-dollar (7.25 billion US) stimulus package to counter a slowdown and boost consumer spending, while Japan revealed measures aimed at stabilising the ailing stock market.

Oil prices have plunged from record highs above 147 dollars, reached in July, because of worries over demand in a slowing global economy, dealers said.

Johnson said any recovery in oil prices will depend partly on moves by the Organisation of the Petroleum Exporting Countries (OPEC) cartel, which is to told an emergency meeting in Vienna on November 18 to discuss the effects of the international financial crisis.

Once the global banking crisis is surmounted, a recovery in oil will also depend on whether there is a slowdown in growth next year, and what impact that would have on demand for energy, Johnson said.