Oil Prices Top $52 Level

Prices surge from the latest record high after mixed inventory data.
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Updated from 2:10 a.m. EDT

Crude oil prices surged again Wednesday, closing above $52 a barrel for the first time.

The November futures contract gained 93 cents, or 1.8%, to $52.02 in regular floor trading on the New York Mercantile Exchange. Prices hit a session high of $52.15.

Prices continue to gain from short-term supply worries. U.S. production is still far from returning to normal after Hurricane Ivan disrupted operations in the Gulf of Mexico three weeks ago. Production is still some 27% below normal. In addition, traders are concerned about exports from Nigeria after a week of civil unrest there and now the possibility of a strike by the oil workers union.

Weekly inventory data from the Department of Energy Wednesday showed an increase in crude oil and gasoline stockpiles, but a decline in distillates, which include such products as home heating oil. Last week's data showed the first crude inventory increase in two months.

In the past four sessions, crude has busted through $50, $51 and $52 a barrel, the latest record highs in a month-long surge that had added more than 15% to the price of a barrel of oil.

The developments in the Gulf and Nigeria are just the latest catalysts for a market that's marched steadily higher since late April. Worries about exports from Iraq and Russia have been a major cause of concern. Traders have also built in a so-called terror premium after a series of attacks on oil industry facilities and personnel in Saudi Arabia in the late spring.

A world of worry and unusually strong global demand has kept market sentiment bullish despite efforts by OPEC to keep a lid on prices. Saudi Arabia last Tuesday said it would boost its official production capacity by 1.5 million barrels to 11 million barrels a day.

The move by the world's largest oil exporter follows OPEC's decision two weeks ago to increase its official production ceiling for the third time in three months. The cartel said it was raising output by 1 million barrels a day, after boosting production by a combined 2.5 million barrels in July and August.