Oil prices rose today to hold above $50 a barrel with any dip below that level seen as a buying opportunity despite rapidly rising supplies in the United States.
US light crude climbed 23 cents to $50.60 a barrel, about 13 per cent below the all-time record $58.28 struck on April 4th but still 16 per cent above prices at the end of 2004.
London's Brent crude rose 22 cents to $51.00 a barrel.
Oil prices have steadied after two-weeks of losses from record peaks, triggered by rising crude inventories in the United States, additional OPEC supply and signs that strong demand growth, especially in China, may be easing faster than expected.
"More and more people are becoming convinced that oil above $55 is not sustainable in the long term. But a lot of people are willing to come back into the market when prices go below $50," said David Thurtell, a Sydney-based commodities strategist at Commonwealth Bank of Australia.
"If US stocks continue to build we could come down to the $46 mark." Analysts are predicting that US crude inventories will rise for the 10th week in a row when the government Energy Information Administration releases fresh data on Wednesday.