Oil rallies 1.2
FTSE up more than 1, SP futures down 0.4
Nikkei rises 0.84, Chinese stocks up 0.7
Payrolls seen slowing this week, Fed minutes seen hawkish

LONDON, July 4 Reuters World stocks rose in holidaythinned trade on Monday, helped by a bounce in oil as concerns over tight supply outweighed recession fears.

European stocks rallied 0.8 and Britain39;s FTSE rose over 1, boosted by gains in oil and gas companies.

Oil dropped 1 a barrel earlier on Monday on worries about the global economic outlook, but roared back on data showing lower output from the Organization of the Petroleum Exporting Countries OPEC, and on unrest in Libya and sanctions on Russia.

Ecuador39;s oil production has been hit by unrest recently, and a strike in Norway could cut supply this week. 

This backdrop of mounting supply outages is colliding with a possible spare production capacity shortage among Middle Eastern oil producers, said Stephen Brennock of oil broker PVM.

And without new oil production hitting markets soon, prices will be forced higher.

Output from the 10 members of OPEC in June fell 100,000 barrels per day bpd to 28.52 million bpd, off their pledged increase of about 275,000 bpd, a Reuters survey showed.

Brent crude jumped 1.25 to 113.02, while U.S. crude rose 1.2 to 109.76 per barrel.

MSCI39;s world equity index gained 0.38 after losing 2.3 last week.

Global equities hit 18month lows last month on anxiety about rising inflation and interest rates, but have since…