* Oil climbs on hopes major oil producers cut output
* Dollar slips as Fed eyes global, market developments
* U.S. stocks little changed, European shares fall
* Gold prices retreat from 12-week highs
(Updates trading, changes dateline, previous LONDON)
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.
World stock markets were mixed. Wall Street indexes were
mostly little changed after advancing earlier on a boost from
the energy sector, while shares in Europe fell following
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
officer 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.
Benchmark Brent futures LCOc1 jumped as much as 8 percent
to nearly $36 a barrel on news of the potential deal. They were
last up $1.03, or 3.11 percent, at $34.13 a barrel. U.S. crude
CLc1 was last up $0.88, or 2.72 percent, at $33.18 per barrel.
O/R
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 0.4
percent at 98.543. FRX/
The possibility of a slower path for U.S. rate hikes was
seen as less welcome by stock market participants as some had
hoped the Fed might put the brakes on raising rates altogether.
U.S. stocks were mixed after earlier advancing, amid some
disappointment the U.S. central bank didn't hint it would back
away from hiking interest rates this year.
The Dow Jones industrial average .DJI fell 34.45 points,
or 0.22 percent, to 15,910.01, the S&P 500 .SPX fell 0.17
points, or 0.01 percent, to 1,882.78 but the Nasdaq Composite
.IXIC was up 12.74 points, or 0.29 percent, to 4,480.90. .N
Europe's FTSEurofirst 300 .FTEU3 index of top shares fell
1.74 percent, to 1,317.49 due to disappointing corporate
results. .EU
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 45 nations, fell 0.22 percent to 366.26.
In the bond market, benchmark 10-year Treasury notes
US10YT=RR were little changed in price for a yield of 2.003
percent, while 10-year German Bunds DE10YT=RR were yielding
0.408 percent, down 4 basis points. US/ GVD/EUR
Spot gold prices XAU= fell $9.38 or 0.83 percent, to
$1,115.81 an ounce. GOL/