Updated from 12:19 p.m. EDT

Oil prices climbed Monday, as OPEC members expressed concerns that their full-tilt production campaign might not be enough to create a supply buffer. An energy industry mega-merger and far-flung earnings news created pockets of strength among stocks.

June crude closed up $1.09 at $52.05 on Nymex. Gasoline prices were up 1 cent at $1.48 a gallon.

Kuwaiti oil minister and OPEC President Sheikh Ahmad al-Fahd al-Sabah said the cartel is bypassing its former production quotas to reach maximum output,

Reuters

reported. He also said that Saudi Arabia is probably producing close to 10 million barrels a day.

Algeria's oil minister Chakib Khelil said that even if OPEC pumps at full capacity, it might not meet strong fourth-quarter demand without sufficient inventories being built up in advance. "What you need to do is raise stocks in the third quarter to accumulate enough of them in the third quarter that you can deplete stocks and maintain a high level of production for the fourth quarter," Khelil told

Reuters

.

Analysts are convinced OPEC has indeed ramped up its production, as evidenced by rising oil inventories and increased imports by the U.S. But narrow refining capacity remains a concern, as the demand for gasoline in the U.S. rose almost 1% from last year while refinery utilization fell from 96% this time a year ago, to 91.7% today.

A bullish jobs report released Friday by the Labor Department also gave crude prices a boost, signaling the U.S economy is growing ever more hungry for oil.

In corporate news Monday,

Duke Energy

(DUK) - Get Report

agreed to acquire

Cinergy

( CIN) for stock worth about $9.1 billion, expanding the reach of its natural gas and electricity utilities north through Ohio. Cinergy gained 5.1% to $42.44, while Duke fell 1.53% to $28.91.

"This was a bit of a surprise deal," said Moreen Howe, analyst at RBC Capital. "We knew they were looking for alternatives but we didn't know if it would be an acquisition or a monetization of their assets," she said.

Other analysts reported similar shock. One, requesting anonymity, said the deal could open up a consolidation round among utilities with potential buyers being

First Energy

(FE) - Get Report

,

Entergy

(ETR) - Get Report

and

Dominion Resources

(D) - Get Report

.

Houston energy producer

Dynegy

(DYN)

reported a $262 million first-quarter loss, the result of a legal settlement and the restructuring of plant leases. The company also raised its forecast for 2005 cash flow and said it was weighing the sale of its gas-processing operations. Shares added 11.67% to $4.21.

And Southern California utility

Edison International

(EIX) - Get Report

said first-quarter earnings that more than doubled from a year ago, reflecting gains at Mission Energy Holding Co.'s independent power business. The company earned 61 cents a share in the first quarter, up from 30 cents a year ago. Shares rose 3.26% to $37.28.

Swift Energy

(SFY) - Get Report

, which produces oil and gas primarily in the U.S. and New Zealand, said "higher commodity prices and increased levels of production" led to a 76% jump in its net income for the first quarter. Earnings were $25.7 million, or 89 cents per share, compared with $14.6 million, or 52 cents a share, in the same time a year ago. Analysts on average were expecting earnings of 73 cents a share. Shares climbed $2.92 cents, or 10.59%, to $30.49.

The independent energy company

Comstock Resources

(CRK) - Get Report

said its earnings rose despite lower gas production quotas for the first quarter. Net income grew to $15.9 million, or 43 cents a share, from breakeven a year ago. Excluding a loss form derivatives held for price risk management, earnings would be 48 cents a share. This beats analysts average estimate earnings of 46 cents per share, polled by Thomson Financial.

Comstock's production in the first quarter totaled 10.6 billion cubic feet equivalent of natural gas, compared with a production of 10.7 Bcfe in the first quarter of 2004. Shares dove 71 cents, or 2.84% , to $24.29.

Tesoro

, the independent refining company, said the high cost of maintaining its refineries cut its first quarter earnings nearly in half. The company reported a profit of $27.7 million, or 40 cents a share, compared with $50.4 million, or 75 cents a share, a year ago. Also costing it were hefty severance payments to some retired and terminated executive officers, leading to an after-tax charge of $6.3 million, or 9 cents a share. Excluding these items, net earnings were $34 million, or 49 cents a share. Analysts on average expected earnings of 55 cents a share, according to Thomson Financial.

"Overall, our refining margins during the quarter were up year-over-year and quarter-over-quarter, signaling continued strength in market fundamentals. Our plan has been to take needed turnarounds in preparation for another strong summer gasoline season," said Bruce Smith,CEO at Tesoro. Shares rose 93 cents, or 2.34% to $40.63.

Shares of major oil producers were mixed.

Exxon Mobil

rose 0.61%;

Chevron

(CVX) - Get Report

gained 1%;

ConocoPhillips

(COP) - Get Report

increased 1.41%;

Royal Dutch/Shell

( RD) rose 0.20%; and

BP

(BP) - Get Report

fell 0.06%.