* U.S. stocks rise in choppy trade on crude, Facebook
* Oil rises over 2 pct on hopes oil producers cut output
* Dollar falls on bets on Fed hiking U.S. rates gradually
* Gold prices retreat from 12-week highs
(Updates market action, adds quote)
By Richard Leong
NEW YORK, Jan 28 (Reuters) - Crude oil prices rose on
Thursday to their highest in three weeks on hopes for a pact
among oil producers to cut output, while the dollar slipped on
bets that interest rate hikes by the Federal Reserve would be
more gradual than it has suggested.
The rebound in the oil market lifted share prices on Wall
Street and other stock markets in another rollercoaster session.
European stocks fell on disappointing earnings reports.
The persistent volatility in U.S. and European equity
markets underpinned demand for U.S. and German government bonds.
However, gold, normally considered a safer asset in times of
turbulence, retreated from 12-week highs.
"Once the oil market establishes stability, it would be good
for the global economy," said Ron D'Vari, chief executive at
NewOak Capital LLC in New York.
Russian energy minister Alexander Novak and a senior Gulf
OPEC delegate suggested that major oil producers may pare
production in an effort to ease a global supply glut that has
hammered oil prices over the past year and a half.
It remained unclear whether a deal to cut production by up
to 5 percent would be struck anytime soon.
Benchmark Brent futures LCOc1 jumped as much as 8 percent
to nearly $36 a barrel before ending up 79 cents or 2.39 percent
at $33.89 a barrel. U.S. crude CLc1 rose 92 cents, or 2.85
percent, at $33.22 per barrel.
Tumbling energy prices, stemming from worries about
weakening demand from world No. 2 economy China, have roiled
financial markets. This was a concern the Fed cited as a factor
for keeping its key policy rate at 0.25-0.50 percent on
Wednesday. PATH FOR RATE HIKES?
The Fed's worry over global and financial developments
spurred selling in the dollar against most major currencies as
traders reckoned U.S. policymakers would ease back on plans for
four possible quarter-point rate hikes for 2016 that they had
signaled at their December policy meeting.
The dollar index .DXY , which gauges the greenback against
the euro, yen and four other currencies, was last down 0.3
percent at 98.576.
The possibility of a slower path for U.S. rate hikes was
seen as less welcome by stock market participants. Some had
hoped the Fed might put the brakes on raising rates altogether.
Wall Street swung wildly Thursday before settling in
positive territory, helped by blockbuster quarterly results from
Facebook FB.O .
The Dow Jones industrial average .DJI rose 125.18 points,
or 0.79 percent, to 16,069.64, the S&P 500 .SPX gained 10.41
points, or 0.55 percent, to 1,893.36 and the Nasdaq Composite
.IXIC added 38.51 points, or 0.86 percent, to 4,506.68. .N
Europe's FTSEurofirst 300 .FTEU3 index of top shares fell
1.68 percent, to 1,319.229 due to disappointing results from
Roche ROG.VX and Novartis NOVN.VX and worries about bad bank
loans.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 45 nations, gained 0.2 percent.
In the bond market, the yield on benchmark 10-year Treasury
notes US10YT=RR edged down 1 basis point to 1.992 percent,
while 10-year German Bunds DE10YT=RR were yielding 0.408
percent, down 4 basis points. GVD/EUR
Spot gold prices XAU= fell $9.38 or 0.83 percent, to
$1,115.81 an ounce.