Markets are looking to rise this morning as the price of oil rebounds on hope that the airline business will recover and start buying more fuel.

All week long oil prices have been hammered by OPEC’s failure to agree on production cutbacks and the prospect of a price war with non-OPEC member Russia.

The U.S. Consumer Price Index dropped 0.3% in October, but the core rate was up 0.2%. Generally the report confirms that inflation is not a worry.

European stocks are up already today, with the oil price gains leading the way. This is seeing a rally in BP plc, Total Fina Elf SA and Royal Dutch Petroleum Co.

It’s a bit of a circular argument, but British Airways plc is up on news that the oil price is sliding and hope the resulting boost to the economy would restart airline travel.

Nevertheless, that’s the way the market is reacting. The FTSE is up 59 points to 5.297. The CAC 40 has gained 16 points to 4,593. The DAX is up 100 points to 5,106.

Overnight in Asia, stocks rallied on the hope of recovery The Nikkei gained 159 points to 10,649. The Hang Seng added 48 points to 11,287.

In M&A news, Aceralia Corporacion Siderurgica SA and Arbed SA are demanding that their three-way merger partner, Usinor SA, renegotiate terms of their US$5.43 billion deal to create the world’s biggest steelmaker.

It’s also being reported that Allianz AG may sell its Dresdner Kleinwort Wasserstein securities unit after top executive Bruce Wasserstein left to head up rival Lazard.

In earnings news, Cinram International Inc. reported net earnings for the quarter were $3.3 million, compared to net earnings of $0.4 million in the prior year.