* Oil rises as OPEC, partners discuss supply cut
* Wall Street pares gains, European shares hit two-week low
* Dollar index weaker after in-line U.S. consumer price data
* U.S. 10-yr yields rise, helped by Brexit optimism (Updates with opening of U.S. trading; changes dateline, previous MILAN)
By Lewis Krauskopf
NEW YORK, Nov 14 (Reuters) - Oil prices rebounded on Wednesday on hopes for output cuts after a steep drop a day earlier, while the dollar held losses against a basket of currencies following data showing U.S. inflation increased at a rate in line with expectations.
U.S. energy shares supported the S&P 500 as they rose along with oil prices, which were boosted by the growing prospect of OPEC and allied producers cutting output at a meeting next month to prop up the market.
Wall Street opened higher but had backed off most of its gains in late-morning trade.
U.S. crude rose 2.87 percent to $57.29 per barrel and Brent was last at $67.49, up 3.09 percent on the day. The contracts had plunged on Tuesday and benchmark Brent has fallen by over 20 percent since early October on concern about excess supply and slowing demand.
"The dramatic selling across the oil markets in recent days has come to a brief pause," said Jameel Ahmad, head of market research at futures brokerage FXTM.
U.S. consumer prices increased by the most in nine months in October amid gains in the cost of gasoline and rents, according to data on Wednesday.
The Labor Department said its Consumer Price Index rose 0.3 percent last month, while excluding the volatile food and energy components, the so-called core CPI climbed 0.2 percent. Those were in line with forecasts from economists polled by Reuters.
The data could encourage investors about the path of interest rate hikes by the Federal Reserve. The U.S. central bank is widely expected by traders to raise rates at its December meeting, but the number of increases next year is more of a matter of debate.
"You could make the case that because it wasn’t hotter than expected maybe that means the Fed won’t have to be quite as aggressive," said Willie Delwiche, investment strategist at Baird in Milwaukee.
The Dow Jones Industrial Average rose 60.79 points, or 0.24 percent, to 25,347.28, the S&P 500 gained 7.56 points, or 0.28 percent, to 2,729.74 and the Nasdaq Composite added 13.18 points, or 0.18 percent, to 7,214.05.
The pan-European STOXX 600 index lost 0.29 percent.
European shares hit their lowest in two weeks as data showing the German and Japanese economies contracting in the third quarter fuelled worries about global growth.
MSCI's gauge of stocks across the globe gained 0.20 percent.
The dollar index fell 0.29 percent, with the euro up 0.24 percent to $1.1316.
U.S. benchmark 10-year Treasury yields rallied from two-week lows on Wednesday, bolstered by continued optimism about Britain's exit from the European Union.
Benchmark 10-year notes last fell 4/32 in price to yield 3.1599 percent, from 3.145 percent late on Tuesday.
Additional reporting by Gertrude Chavez-Dreyfuss in New York, Alex Lawler and Ahmad Ghaddar in London, Danilo Masoni in Milan Editing by Matthew Mpoke Bigg and Tom Brown