By Grant Smith and Nesa Subrahmaniyan Oct. 30 (Bloomberg) -- Crude oil advanced on speculation interest rate cuts in the U.S. and China may spur a global economic recovery and increase demand for fuels. Oil rose above $70 a barrel for the first time in a week after the U.S. and China, the world's top two energy users, reduced rates yesterday. Stocks rallied around the world and U.S. index futures climbed after the rate cuts, aimed at boosting bank lending and economic growth. ``There's a good chance the rate cut will help the economy to grow again,'' said Wolfgang Kraus, chief energy and commodities trader at BayernLB in Munich. ``We've seen from the corporate side massive buying interest'' and ``that's normally a good indicator they see limited downside risk.'' Crude oil for December delivery climbed as much as $3.10, or 4.6 percent, to $70.60 a barrel on the New York Mercantile Exchange. It traded at $68.45 as of 11:51 a.m. London time. Yesterday, crude oil jumped $4.77, or 7.6 percent, to settle at $67.50 a barrel. Oil prices have tumbled 52 percent since reaching a record $147.27 on July 11 and are down 22 percent from a year ago. Crude prices also climbed as the dollar fell to a one-week low against the euro. The U.S. currency slipped to $1.3082 per euro, the lowest since Oct. 21, from $1.2963 late yesterday. Investors often purchase crude oil and other dollar-priced commodities when the U.S. currency drops because of their use as an inflation hedge. Nigeria Reduces Exports Nigeria will trim crude oil shipments in November and December by 5 percent to comply with the output cut announced by OPEC last week, according to the national oil company. The Organization of Petroleum Exporting Countries reduced its target by 1.5 million barrels a day after meeting Oct. 24. Potential for further OPEC action is among ``a number of elements still in place that would suggest a bullish picture for the second half of next year,'' Harry Tchilinguirian, senior oil analyst at BNP Paribas SA, said in a television interview today. Oil ministers from Iran and Venezuela said this week that OPEC will probably meet again before the group's next scheduled gathering in December to consider a second production cut. The MSCI World Index added 2.6 percent to 948.59 in London, advancing for a third day, the longest winning streak in two months. Commodities such as gold and corn were buoyed by a drop in the U.S. dollar and a rebound in equities after borrowing costs were reduced to alleviate a credit freeze and spur growth. Brent crude oil for December settlement increased as much as $2.88, or 4.4 percent, to $68.35 a barrel on London's ICE Futures Europe exchange, and last traded at $66.29. The contract yesterday gained $5.18, or 8.6 percent, to $65.47 a barrel. U.S. inventories of crude oil and distillate fuel, a category that includes heating oil and diesel, rose last week, an Energy Department report yesterday showed. Crude oil stockpiles climbed 493,000 barrels to 311.9 million barrels in the week ended Oct. 24, the department said. A 1.55 million-barrel gain was forecast, according to the median of 12 analyst estimates before the report. -- With reporting by Christian Schmollinger in Singapore. Editors: John Buckley, Shaji Mathew To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net

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