10 May 2005, 11:16  Oil prices rose above $52 a barrel

Oil prices rose above $52 a barrel on Tuesday as expectations of a further increase in U.S. crude stockpiles and OPEC producing at its strongest level in 25 years failed to ease fears over growing global demand. U.S. light crude traded up 32 cents to $52.35 a barrel. Brent crude oil in London gained 40 cents to $51.69 a barrel. "Seasonally firm demand, especially from the U. S., is expected in the fourth quarter in winter. Demand levels are expected to grow and the question remains whether the high OPEC output can meet the increase," said Tony Nunan with Mitsubishi Corp in Tokyo. Prices are less than $6 below last month's record highs, even though OPEC producers have raised output to a 25-year high of 29.7 million barrels per day (bpd), leaving the 10 OPEC members excluding Iraq that are bound by quotas producing more than 2 million bpd above a formal 27.5 million production ceiling. Qatar Energy Minister Abdullah al-Attiyah had said that while the global oil market was amply supplied, he was concerned about supplies in the fourth quarter when heating fuel demand in the Northern Hemisphere peaked. Algeria's oil minister Chakib Khelil said at the weekend that even if OPEC pumped at full capacity it might not be able to meet strong fourth-quarter demand without sufficient inventories being built up beforehand.

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