SINGAPORE (Reuters) - Oil rose more than $2 on Tuesday amid a broad-based commodities rally, extending a 4 percent gain from the previous session as government moves to rescue banks raised hopes for an economic recovery. Global markets jumped, with Wall Street staging its biggest one-day gain ever and Japan's Nikkei .N225 up more than 13 percent, after governments around the world bet hundreds of billions of dollars to shore up ailing banks. U.S. crude gained $1.75 to $82.94 a barrel by 1:04 a.m. EDT after climbing by more than $2 earlier, while London Brent crude rose $1.35 to $78.81, as concerns over the impact of the financial crisis on oil demand eased. Oil prices had fallen to their lowest level since September 10, 2007 on Friday as investors fled into safer assets. "The current bounce is due to expectations that the economy will recover," said Tetsu Emori, fund manager at Astmax Co Ltd. The U.S. government is set to buy $250 billion in equity stakes in banks, a source briefed on the situation said, while Britain, Germany, France and other European countries pledged more than 1 trillion euros ($1.36 trillion) for bank guarantees and equity stakes. Federal Reserve Chairman Ben Bernanke said in an editorial in the Wall Street Journal that new U.S. measures to aid the financial system would help restore normality to markets, without giving details of the plan, to be announced later on Tuesday. The bailout schemes saw the U.S. dollar fall against the euro, further boosting dollar-denominated oil prices. Investors rushed into oil and other commodities this year as a hedge against the weak dollar and inflation, before worries about slowing demand in the United States and other developed countries knocked crude off its record above $147 set in July. Commodities bull Goldman Sachs on Monday cut its year-end U.S. crude oil target to $70 a barrel, down from a previous forecast of $115, slashed its average 2009 forecast by a third to $86, and warned that prices could hit $50 if the current financial crisis worsened. With the retreat in crude prices, some members of the Organization of the Petroleum Exporting Countries (OPEC) had called for a cut in production levels when the cartel holds an emergency meeting on November 18. Iraq's Oil Minister Hussain al-Shahristani said on Monday that OPEC would consider reducing output if the world does not need its oil. Top exporter Saudi Arabia cut November supplies to one major European refiner, according to a trade source, but told major Asian refiners on Monday that shipments would not be changed. As global markets cheered the government bailouts, oil traders will also look at the weekly U.S. petroleum inventory data to be released on Thursday. Preliminary analyst forecasts have called for a 2.4 million barrel build in crude stocks, a 3.2 million barrel increase in gasoline supplies and a 0.8 million barrel rise in distillates. (Reporting by Chua Baizhen, Editing by Clarence Fernandez)

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