Oil prices held gains above $51 a barrel today on a technical rebound and buoyed by news that Opec does not plan to increase output at its next meeting.
However, analysts believe that prices will ease in the short term, driven largely by high US inventory levels and ample supply from the Organization of the Petroleum Exporting Countries.
US light crude traded up 36 cents to $51.32 a barrel; London Brent crude gained 59 cents to $51.36.
The Commodity Futures Trading Commission said speculators had cut their net-long positions on the New York Mercantile Exchange for the week ended May 3rd to 8,403 from 26,008 in the previous week.
This came in the wake of news that US crude stocks had risen to 327 million barrels, their highest level in nearly six years.
OPEC President Sheikh Ahmad al-Fahd al-Sabah said yesterday the cartel would not raise production at its meeting in Vienna next month as the markets were amply supplied.
Iran's Oil Minister Bijan Zanganeh was also quoted as saying that he was unaware of any suggestion to raise OPEC production in May.
Indonesia, the Asia Pacific's only Opec member, said today world oil prices would stay high through the end of the year.
The country's Opec governor, attributed this to strong global oil demand that is forecast to grow by about 1.6 million bpd in 2005; non-OPEC additional production was seen at 600,000 bpd, down from a previous forecast of 990,000 bpd.