Oil prices rose on Thursday after speculators rushed in to defend a brief dip below $50 a barrel, even as stockpiles in the United States zipped along at their highest level in nearly six years.
"There was an abrupt surge in prices just about five minutes before the close as a lot of paper buying and short-covering came in," a floor trader said.
U.S. light crude settled up 70 cents to $50.83 a barrel after slipping as low as $49.50, while in London Brent crude futures gained 16 cents to $51.13.
Prices are nearly 13 percent below the record-high of $58.28 for U.S. crude hit in early April as robust production from Middle East &to=http:// english.pravda.ru/main/2002/09/18/36828.html ' target=_blank>OPEC countries has boosted world supplies.
Government data released on Wednesday showed U.S. crude stocks rose by 2.6 million barrels last week to 327 million barrels, their highest since July 1999. The rise, the 11th in the past 12 weeks, was more than double analyst forecasts, tells Reuters.
&to=http:// english.pravda.ru/war/2003/03/05/44027.html ' target=_blank>Saudi Arabia, the world's top oil exporter, increased oil output by 110,000 barrels, or 1.2 percent, to 9.45 million barrels a day in April, according to a May 3 Bloomberg survey. That's close to Saudi Arabia's oil minister Ali al-Naimi April 21 output estimate of 9.5 million barrels of a day. The country has additional capacity to pump another 1.5 million more barrels a day, he said.
The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, raised its production quota in March to help lower prices and swell global stockpiles before the fourth quarter.