By EDITH BALAZS
Associated Press Writer
MAY. 31 3:21 P.M. ET Crude oil futures rose for the sixth straight trading session Tuesday, settling near $52 a barrel and leading some brokers to conclude that high prices may stick around.
In mid-May, prices fell below $47 a barrel in response to steadily rising crude inventories, but last week's surprise drop in U.S. oil supplies brought nervousness back into the market.
"I think the bears are becoming less confident in their positions and they're buying on the dips," said Tom Bentz, a broker at BNP Paribas Commodity Futures in New York.
While Bentz conceded that no fuel shortages are likely, he said the market's underlying fear of an unexpected output disruption will make it difficult for prices to fall sharply anytime soon. "Longer term, I still believe that we're in a big uptrend," he said.
Light, sweet crude for July delivery rose 12 cents to $51.97 a barrel on the New York Mercantile Exchange, which was closed Monday for the Memorial Day holiday.
Oil prices are about 23 percent higher than a year ago.
Heating oil futures rose less than a penny to $1.45 a gallon, while unleaded gasoline futures dropped 1.53 cents to $1.46 a gallon.
In London, Brent crude for July delivery fell 52 cents to $50.18 a barrel on the International Petroleum Exchange.
The summer driving season in the United States, which kicked in Monday with the holiday, has some traders worried that high gasoline demand could cause supplies to tighten.
However, Bentz and other brokers said U.S. crude inventories are at healthy levels, currently 32.4 million barrels higher than year-ago levels.
The Organization of Petroleum Exporting Countries will meet in mid-June to decide whether to slash output, already at 30 million barrels daily. The oil cartel, which pumps out 40 percent of the global crude, is producing at full-tilt in a bid to cool prices and calm market fears.
"Should prices dip below $45 a barrel, I'm convinced OPEC will take immediate action in cutting those output levels," said Orrin Middleton, energy analyst at Barclays Capital in London.
Analysts expect OPEC to maintain current output levels to meet demand in the fourth quarter.
Shum said, however, the market remains cautious after Saudi Arabia's King Fahd was hospitalized following a bout of pneumonia on Friday. The kingdom's strategic importance as the nation with the world's largest oil reserves means even a stable succession could affect world markets and have widespread political fallout.
On Tuesday, the kingdom's defense minister said King Fahd's health is continuing to improve and he soon be discharged from the hospital soon.
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Associated Press Writer Sui-Lee Wee in Singapore contributed to this report.
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