Oil prices higher in Asian trade

SINGAPORE: Oil prices rose in Asian trade on Wednesday, tracking gains on Wall Street ahead of the release of the latest report on US crude inventories, dealers said.

New York's main futures contract, light sweet crude for delivery in June, gained 51 cents to $ 49.06 a barrel.

Brent North Sea crude for June delivery climbed 35 cents to 50.17.

"We believe that with a rising stock market, we'll have an improved demand for oil," Phil Flynn at Alaron Trading said.

Slowing demand due to the global economic downturn has brought crude prices far down from record highs above $ 147 per barrel in July last year.

The US Department of Energy will release its weekly report on US oil stockpiles later today.

Some analysts said the the Organisation of the Petroleum Exporting Countries (OPEC) would have to consider another production cut to offset current inventories, even if there is some economic recovery later in the year.

"Some of the latest bleak demand data suggest that without a further OPEC cut, we may not see a significant stock draw until the fourth quarter of 2009," JPMorgan Chase analyst Lawrence Eagles said.

"In this environment six months is a long time to support a burdensome inventory overhang, and virtually full land-based tanks make the market vulnerable to a severe downside correction," he said.