By Moming Zhou, MarketWatch NEW YORK (MarketWatch) -- Crude-oil futures rose Monday, gaining for a second straight session, after a top Organization of Petroleum Exporting Countries official said the cartel should cut production quotas. The gains in crude, however, were limited by a strengthening dollar, which tends to apply downward pressure on dollar-denominated commodities prices. OPEC should order a "substantial" cut in oil output at its emergency meeting Friday in Vienna, OPEC President Chakib Khelil said over the weekend, according to media reports. Khelil is Algeria's energy minister. There are "heightened expectations" in the energy market that OPEC will reduce production, Sucden Research energy analyst Nimit Khamar said, adding that signs that the global financial crisis may be easing contributed to firming in the price of crude as well. Crude for November delivery was last up 34 cents to $72.19 a barrel on the New York Mercantile Exchange. The contract advanced more than 3% to $74.50 earlier, but the dollar's gains took the steam out of the rally. The dollar move higher on the euro and the British pound, as a key benchmark that tracks the value of the greenback against other major currencies climbed more than 1%. See Currencies. OPEC production OPEC, the cartel that controls 40% of the world's oil production, last week brought forward its meeting, originally scheduled for Nov. 18, to this Friday. Pressures have been mounting within the 13-member group to cut production as crude prices have slumped by more than 50% from the all-time high of $147.27 a barrel hit in July. "There will be a reduction in production at the next extraordinary meeting of OPEC, and it will have to be a substantial one to get the balance right between supply and demand," Khelil said, according to an Agence France-Presse report. Khelil said that OPEC wanted to see oil prices "remain stable" throughout the first half of 2009. "We want a stable price per barrel -- neither too high, nor too low, between 70 and 90 dollars," Khelil said. Separately, OPEC Secretary General Abdullah al-Badri may meet Russia's top leaders in Moscow on Tuesday as OPEC and non-member Russia seek closer ties, Russia's Energy Minister Sergei Shmatko said, according to Reuters. Although Shmatko said the two sides would not discuss output cuts, Russia and other non-OPEC oil producers "may also be invited to join" in a production reduction, said Michael Fitzpatrick, analyst at futures brokerage MF Global. Russia is the world's second-largest oil producer after Saudi Arabia. Gasoline prices retreat further In other energy futures, November heating oil gained 2.55 cents, or 1.2%, to $2.1584 a gallon, and November natural-gas futures climbed 18.8 cents, or 2.8%, to $6.9740 per million British thermal units. However, November reformulated gasoline fell 1.41 cents, or 0.9%, to $1.6520 a gallon. Retail gas prices fell more than a dime a gallon, hitting a national average of $2.923 Monday, according to auto club AAA. Crude oil prices have been falling as the likelihood of a global recession increases. The benchmark contract lost 8% last week. On Monday, China's National Bureau of Statistics said its economy, which accounts for the bulk of growth in global oil demand, decelerated more than expected in the third quarter, marking the fifth straight quarterly slowdown. China's economy expanded by 9% in the third quarter, ticking down from 10.1% growth in the second quarter. See full story. As recession fears grip major world economies, OPEC other major energy organizations have slashed their forecasts for global oil demand. OPEC said last Wednesday that consumption will grow 550,000 barrels a day worldwide this year compared with 2007, revised down by 330,000 barrels from last month's forecast. The International Energy Agency and the U.S. Energy Department's Energy Information Administration also lowered their forecasts. See full story.

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