Updated from 12:28 p.m. EDT

Oil prices inched higher Tuesday after trading in the red most of the day, as concerns about fourth-quarter demand growth and the approaching hurricane season loomed.

The July crude contract closed up 12 cents to $51.97 a barrel on Nymex after touching $52 earlier in the session. Gasoline futures were little changed at $1.469 a gallon.

Despite signs of slower economic growth, investors continue to worry about a fourth-quarter demand increase that could wipe out spare capacity, as demand for heating fuels surges.

Oil rose 6% last week, pushed up by an Energy Department report that showed the first decline in U.S. crude inventories in six weeks. Some analysts viewed the buying as overblown, however, considering that total inventories remain above 330 million barrels, the highest level in six years.

This week's report will come a day later than usual on Thursday because of the Memorial Day weekend.

Meanwhile, the Organization of Petroleum Exporting Countries will meet on June 15 in Vienna to coordinate its production policy. Most analysts expect it to reiterate its commitment to supply the world with as much oil as possible.

Algerian Energy Minister Chakib Khelil said on Tuesday that he expects existing production quotas to remain unchanged after the meeting,

Reuters

reported. Prices, he said "are going to be high. I don't think we can influence crude prices. My feeling is that they are going to be higher than what they are today."

Khelil estimated that demand for oil will increase by year's end but that OPEC won't keep up with it. "Demand for oil is going to be very high, and there is not really capacity to satisfy it," he said.

In corporate news,

Exxon Mobil

(XOM) - Get Report

was raised Tuesday to overweight from neutral on the basis of valuation by both J.P. Morgan's Jennifer Rowland and Citigroup's Doug Leggate. J.P. Morgan said Exxon hasn't been this cheap relative to it peer group in five years. "Valuation discount signals strong likelihood for share price rally," Rowland said in a note.

"XOM remains essentially a valuation call," Leggate said in a note. Exxon shares rose 0.04% to $56.82.

Citigroup also raised

Chevron

(CVX) - Get Report

to a buy. "CVX stands out. A combination of operating catalysts and valuation makes it one of the most attractive of the oil majors," Leggate said. Chevron dropped 0.73% to $54.18.

The Spanish-Argentine oil company

Repsol

(REP)

said it plans to invest $26.1 billion on new exploration and production projects over the next five years. The company will invest mainly in Algeria, Libya, Venezuela, Trinidad, Tobago, the U.S., Iran and West Africa.

Diamond Offshore

(DO) - Get Report

said it signed an $84 million contract to employee one of its deepwater rigs in the Gulf of Mexico. The deal represents a 50% increase in dayrates, to $230,000 a day, according to Raymond James. Shares climbed 18 cents, or 0.38%, to $47.17.

Shares of other major oil producers were mixed.

ConocoPhillips

(COP) - Get Report

inched up 0.77%;

Royal Dutch/Shell

(RD)

dropped 1.71%; and

BP

(BP) - Get Report

fell 1.43%.