VIENNA -- Crude futures rose to their highest level in nearly four months yesterday, lifting shares of oil companies to new peaks as Wall Street digested a $3 per barrel run-up in the past week and the growing perception that OPEC is intent on keeping prices high.
Light, sweet crude for April delivery rose 10 cents to $51.49 a barrel on the New York Mercantile Exchange, while Brent crude rose 17 cents to $49.61 on the International Petroleum Exchange in London.
Crude futures are 44 percent higher than a year ago. Oil prices rallied nearly $3 a barrel on Tuesday due to the declining value of the dollar, colder weather in Western Europe and the US Northeast, and traders' nervousness about the world's tight supply-demand balance.
Traders said they're seeing renewed fervor for speculative buying, too.
The Energy Department reported Thursday that inventories of crude oil rose by 600,000 barrels last week to 297 million barrels, or 8 percent above year-ago levels.
Gasoline inventories rose by 1.8 million barrels last week to 223.5 million barrels, or 9 percent higher than last year.
However, the supply of distillates -- heating oil, diesel, and jet fuel -- slipped by 700,000 barrels to 111.8 million barrels, or 3.5 percent below year-ago levels.
A greater cause for concern for traders, however, is the Organization of Petroleum Exporting Countries, which meets in Isfahan, Iran, next month. Oil prices have seesawed in the past week on comments from OPEC members, signifying traders' overwhelming jitters.
Reflecting such worries, Claude Mandil, the head of the Paris-based International Energy Agency, called on OPEC yesterday not to vote for a cut in output at its March 16 meeting.
''I certainly think at these levels the group should refrain from cutting," Mandil told Dow Jones Newswires, describing present prices as ''absolutely unbearable."
Mandil again played down OPEC's fears that prices may crash during the second quarter when demand typically falls. He also reiterated his concern that high oil prices are harmful to the global economy.
In Edinburgh, John Waterlow of Wood Mackenzie Consultants said the market would likely stay bullish beyond March 16 because OPEC appeared determined to keep prices up in the long term.