Oil edges higher

Oil rose on Thursday as reassuring US jobs data and upbeat corporate profits lifted stocks outweighed rising energy inventories and slumping demand. US crude rose 15 cents to settle at $51.12 a barrel. Brent crude rose 2 cents to settle at $50.80 a barrel.
The number of US workers filing new claims for unemployment aid fell unexpectedly last week, suggesting the pace of layoffs was easing, helping to lift the US stock market in afternoon activity. Further support came as profit reports from companies like Dow Chemical Co added to optimism over the state of the banking sector and hopes the recession is easing, outweighing news US automaker Chrysler had filed for bankruptcy.
"The upbeat stock market has been providing the support lately," said Tom Bentz, senior commodity analyst for BNP Paribas Commodity Futures in New York. "We're drowning in oil and the market ignores that fact and prefers to focus on the possibility that the economy is recovering."
Oil prices have tumbled from record peaks over $147 a barrel hit in July, dragged down as demand slows and inventories risse due to the economic crisis US oil demand in February fell to the lowest level for the month in 11 years, according to data from the Energy Information Administration, down 5.4 percent compared with year-ago levels.
On Wednesday, the EIA reported US oil inventories rose to a fresh 19-year high last week. Gasoline stocks, however, showed a surprisingly steep 4.7-million-barrel drop ahead of US summer driving season. Markets were also eyeing the flu outbreak as officials urged increased world-wide precautions against an imminent pandemic and Mexico began shutting down parts of its economy to slow the spread of the new flu strain.
Analysts have said the flu could hurt jet fuel demand by curtailing travel. "Swine flu has become almost a sideshow for the oil market - it might impact demand in specific areas like jet fuel, but if we can confirm the overall economy has bottomed, prices should slowly grind higher" said Paul Harris, analyst at Bank of Ireland.
Iraq's oil minister Hussain al-Sharistani said world oil markets seemed to be coming into balance, but did not rule out a further cut in oil supplies by the Organisation of the Petroleum Exporting Countries at its next meeting on May 28.