Oil rebound on China stimulus hopes

Oil prices recovered slightly on Thursday on talk of fresh Chinese stimulus moves and one day after New York crude had plunged close to a two-month low point on eurozone debt woes, dealers said. New York's main contract, light sweet crude for November, rose 28 cents to $90.26 per barrel compared with the close on Wednesday, when it plunged to $88.95 in intraday dealing -- the lowest point since August 3. Brent North Sea crude for delivery in November advanced 17 cents to $110.21 a barrel in London midday deals on Thursday. "The oil market rebounded, posting solid gains following growing discussions of a further stimulus package from China that improved market sentiment and increased risk appetite," said analyst Myrto Sokou at the Sucden brokerage. There were rising hopes that Beijing would soon announce fresh easing to boost the Chinese economy -- the world's biggest energy consumer -- after a string of recent weak data. Chinese markets are closed next week for the National Day holiday, which could provide a chance for leaders to introduce measures such as an interest rate cut or a reduction in bank reserve requirements, dealers said. Later on Thursday, Spain's embattled government will pass its 2013 austerity budget, with 39 billion euros ($50 billion) in savings, including an anticipated third straight year of salary freezes for civil servants. Oil had plunged on Wednesday as investors fretted over demand concerns linked to the eurozone crisis, in the wake of anti-austerity unrest on the streets of Athens and Madrid. "There were protests and demonstrations in Athens and Madrid and, when consumers decide to take to the streets instead of consuming, investors take note and flee stock and commodity markets in search of safe havens," said PVM broker analyst Tamas Varga. Thursday's budget, to be followed by the release of an audit of Spain's sickly banking system on Friday, was seen by markets as one of the final acts before a sovereign bailout of casb-strapped Spain. Oil prices were also being pressured followed comments this week by International Monetary Fund chief Christine Lagarde, who warned that the IMF would likey cut its global economic growth estimates next month. "Lower global growth means lower demand for oil. This was the thinking of oil players yesterday as the oil market moved lower," Varga added.