By Carolyn Cohn

LONDON (Reuters) - World stocks rose in holiday-thinned trade on Monday, helped by a bounce in oil as concerns over tight supply outweighed recession fears.

European stocks rallied 0.8% and Britain's FTSE rose over 1%, boosted by gains in oil and gas companies. [.EU][.L]

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.

Ecuador'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.

MSCI's world equity index gained 0.38% after losing 2.3% last week.

Global equities hit 18-month lows last month on anxiety about rising inflation and interest rates, but have since made minor gains.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.34%.

Chinese blue chips closed 0.7% higher, helped by a 4.65% surge in Chinese healthcare stocks. Cities in eastern China tightened COVID-19 curbs on Sunday amid new coronavirus clusters.

Japan's Nikkei added 0.84%.

U.S. S&P 500 futures and Nasdaq futures fell 0.4% and 0.5% respectively, however, as recent soft U.S. data suggested downside risks for this week's June payrolls report. U.S. stock markets are shut for Independence Day on Monday.

"Some markets are starting to find their footing but there's a lot of volatility right now," said Sebastien Galy, senior macro strategist at Nordea Asset Management.

TECHNICAL RECESSION

The Atlanta Federal Reserve's much watched GDP Now forecast slid to an annualised -2.1% for the second quarter, implying the country was already in a technical recession.

The payrolls report on Friday is forecast to show jobs growth slowing to 270,000 in June, with average earnings slowing a touch to 5.0%.

Minutes of the Fed's June policy meeting on Wednesday are expected to sound hawkish, however, given the committee chose to hike rates by a super-sized 75 basis points.