Updated from 1:12 p.m. EDT

Crude oil edged higher Thursday as buyers swooped in just above the $50-a-barrel mark.

May crude closed up 91 cents at $51.13 per barrel on Nymex, having hit a seven-week low yesterday, down roughly $7 from the contract's peak. Unleaded gas rose about 2 cents to $1.504 a gallon.

U.S. Department of Energy data Wednesday showed crude stocks rose for the ninth straight week. Gasoline inventories also increased, easing some supply concerns as production builds ahead of the peak summer driving season.

Also supporting the bears was yesterday's Commerce Department report on retail sales, which came in weaker than expected. Several economists trimmed their estimates of U.S. economic growth on the data.

"This is an overbought market where crude could remain under selling pressure for 6 weeks or more," says Tim Evans, senior energy analyst at IFR Markets. The advance from December's bottom price of $40.25 a barrel to the recent high of $58.25 a barrel has been ignoring the increase in state inventories. "Speculation is why we are up here," Evans says.

According to Evans, gasoline supplies for the four weeks ended April 8 were up 3.75%, compared with the same time a year ago, while demand during the same time period only grew 0.5%. "The market is well supplied so it's time for speculators to just ring the cash register and take their profits away," Evans says.

Still, most energy analysts doubt oil is likely to fall dramatically from its present levels. The current Energy Department forecast calls for oil holding above $50 a barrel through 2006. Growing interest in oil speculation is also likely to provide price support.

A year ago, the benchmark U.S. crude was trading around $37 a barrel. Prices stormed higher during the spring and summer, eclipsing the record highs of 1990 and 1991 around the time of the first Persian Gulf War and rallied further into the summer before undergoing a steep price correction.

Oil companies continue to face a number of political uncertainties abroad. On Thursday, Venezuelan President Hugo Chavez demanded the payment of unpaid taxes from foreign oil producers working there, the

AP

reported.

Venezuela has operating agreements with companies such as

ChevronTexaco

(CVX) - Get Report

,

BP

(BP) - Get Report

,

Total S.A.

(TOT) - Get Report

,

Petrobras

(PBR) - Get Report

,

Repsol YPF

( REP),

Royal Dutch/Shell

( RD) and

CNOOC

(CEO) - Get Report

.

Elsewhere in the refining industry,

Arizona Clean Fuels LLC

, received a long-sought permit from the Environmental Protection Agency to build the first refinery in the U.S. in more than 25 years. The project is estimated to cost $2.5 billion, as the company now faces the challenge of getting funding. No details were given on potential investors

In other company news,

Kerr-McGee

(KMG)

, an energy holding company, says it will buy back up to $4 million of common stock at a roughly 15% premium to its share price. The deal is designed to fend off a proxy fight with shareholders Carl Icahn and Jana Partners. The company will pay between $85 and $92 a share. Shares jumped on the buyback news by $5.44, or 7.35%, to $79.41.

One company posed to realize significant profits from the Kerr-McGee buyback is

Equitable Resources

(EQT) - Get Report

, the integrated gas and oil company that owns 7 million shares of Kerr-McGee. Anatol Feygin, analyst at Bank Of America, says Equitable shares will "outperform meaningfully based on the KMG tender and the dividend increase." The company said Wednesday it will increase its dividend by 11%.

Range Resources

(RRC) - Get Report

, an independent natural gas and oil company, says its first-quarter production volumes of natural gas increased by 29% from last year, to 228.8 million metric cubic feet a day "due to continued drilling success and acquisitions completed in 2004." In its oil drilling segment, the company says it will report a $4 million exploration expense. Shares rose 37 cents, or 1.58%, to $23.81, after rising more than 3% earlier.

Land drilling company

Patterson-UTI Energy

(PTEN) - Get Report

was rated overweight in new coverage by analyst Kevin Pollard at J.P. Morgan. "Demand for land rigs is finally exceeding supply," writes Pollard in a note, making the company's valuation "attractive" and raising its in earnings upside potential.

The rig count in the U.S. has been continuously falling from 4,500 land rigs in the early 1980s, to about 1,300 rigs today. Shares of Patterson rose 57 cents, or 2.41%, to $24.43.

Shares of most major oil producers staged modest turnarounds as oil prices picked up.

Exxon Mobil

(XOM) - Get Report

rose 6 cents, or 0.10%, to $59.21; ChevronTexaco gained 3 cents, or 0.06%, to $54.30; BP dropped 42 cents, or 0.69% to $60.69; Royal Dutch/Shell lost 20 cents, or 0.33%, to $59.89, and

ConocoPhillips

(COP) - Get Report

rose 37 cents, or 0.35%, to $105.67.