* Iran says it supports meeting between OPEC, other
producers
* U.S. dollar weakness supports oil price
* Record-high U.S. crude inventories weigh
(Adds details, quote, updates prices; changes dateline,
previous LONDON)
By Devika Krishna Kumar
NEW YORK, Feb 4 (Reuters) - Oil prices rose for a second
straight day on Thursday, with Brent trading above $35 a barrel
on signs of possible talks aimed at a cut in global production,
while a weaker dollar offset concern about ample supply and
record-high U.S. inventories.
Crude added to the previous session's 7 percent jump after
an Iranian official was quoted as saying Tehran supported a
meeting between OPEC and other oil producers. That raised hopes
they could take action to support prices despite widespread
skepticism in the market.
Iran's role in any potential deal to rein in production is
critical, as it appears determined to boost production and gain
market share after the lifting of sanctions.
The dollar weakened further on speculation the Federal
Reserve might not raise interest rates this year. A falling
dollar tends to support prices of oil and other
dollar-denominated commodities.
"Headlines continue to fly about an OPEC/non-OPEC meeting.
We are currently in an environment of elevated rumors," said
Olivier Jakob, oil analyst at Petromatrix. "Without a fresh
development Brent might face some difficulty to fly above $40."
Brent LCOc1 futures rose 39 cents, or 1.1 percent to
$35.43 a barrel, by 10:55 a.m. EST (1555 GMT). Prices have
gained about 25 percent since falling on Jan. 20 to $27.10, the
lowest since November 2003. U.S. crude CLc1 rose 89 cents to
$33.17 per barrel, a 2.8 percent gain.
After falling as much as 11 percent over two days, oil
soared 7 percent on Wednesday. In part fueling the week's
roller-coaster ride was the sudden liquidation of a $600 million
leveraged fund bet on falling prices, market sources said.
While the likelihood of a coordinated production cut is
unlikely, the need is evident, analysts say.
"Many people are hoping that oil prices go higher,
especially producing countries whose budgets are under stress,"
said Andrew Lipow of Lipow Oil Associates.
"They're in dire financial straits and want to take action
in order to increase the price of crude oil, but the problem is
that I don't believe every OPEC and non-OPEC member is willing
to all cut their proportionate share."
So far, none of OPEC's Gulf members, including top exporter
Saudi Arabia, has publicly backed a meeting.
However, on Wednesday, Iranian news agency Shana quoted
Venezuelan Oil Minister Eulogio Del Pino as saying that six
producing countries, including OPEC members Iran and Iraq and
non-members Russia and Oman, supported a producer meeting.
Venezuela's repeated calls for an emergency meeting have
fallen on deaf ears in recent weeks.
Gulf members were behind OPEC's 2014 shift in strategy not
to cut production and instead let lower prices curb more
costly-to-develop supply sources. A rise in OPEC output since
then has swelled supply and contributed to the price decline.
Evidence of the rising supply glut mounted when U.S. crude
inventories USOILC=ECI climbed by 7.8 million barrels last
week to a record 502.7 million barrels, according to a
government report. EIA/S