GLOBAL MARKETS-Stocks rise on Citigroup rescue, oil gains

* U.S., European stocks surge after Citigroup is rescued

* Govt debt prices fall but yields close to historic lows

* Oil rises above $53 a barrel as Venezuela urges OPEC cut

* Dollar falls vs euro, sterling as risk aversion cools (Repeats to add dropped word "the" to the first paragraph) (Recasts with U.S. markets, adds byline; changes dateline; previous LONDON)

By Herbert Lash

NEW YORK, Nov 24 (Reuters) - U.S. and European stocks surged in a broad relief rally on Monday and government debt prices fell after Washington rescued Citigroup, reassuring investors who feared its collapse could push the financial system into the abyss.

Oil rose more than $3 a barrel as investors anticipate a further cut in crude supplies by members of the Organization of Petroleum Exporting Countries.

The euro and sterling extended gains against the U.S. dollar as risk aversion eased after the U.S. government agreed to inject $20 billion of fresh capital into Citigroup (C.N).

The $300 billion-plus rescue package for Citigroup spurred broad equity rallies on both sides of the Atlantic, outweighing more gloomy economic news.

German corporate sentiment plunged to its lowest level in nearly 16 years in November, an Ifo survey showed, while the pace of existing U.S. homes sales fell 3.1 percent in October and the median home price dropped to its lowest in more than four years, a National Association of Realtors report showed.

The Citigroup news lifted the battered financial sector, and an index of home builders .DJUSHB jumped 11.6 percent, its biggest single-day gain since the collapse of Bear Stearns in March.

"The news on Citigroup is about confidence," said Cummins Catherwood, managing director at financial services firm Boenning & Scattergood in West Conshohocken, Pennsylvania.

"There's not a master stroke that's going to make everybody come out and be happy again. Confidence is a mosaic that has to be put up piece by piece and the Citi plan is just one piece."

Citigroup Inc shares jumped more than 50 percent to about $5.75 after plummeting more than 60 percent to a low of $3.05 on Friday on fears the No. 2 U.S. bank by assets might not survive.

Citigroup shares were among the Dow's top boosts, along with JPMorgan Chase and Co (JPM.N). Rising energy prices underpinned in oil stocks, leading Exxon Mobil Corp (XOM.N), up 3.1 percent at $78.19.

At 1 p.m., the Dow Jones industrial average .DJI was up 262.76 points, or 3.27 percent, at 8,309.18. The Standard & Poor's 500 Index .SPX was up 34.68 points, or 4.33 percent, at 834.71. The Nasdaq Composite Index .IXIC was up 53.79 points, or 3.89 percent, at 1,438.14.