Oil prices climbed above $50 a barrel Wednesday despite rising U.S. inventories of crude oil and gasoline, a counterintuitive market response that analysts chalked up to technical trading and speculation about future supply tightness.

Light, sweet crude (search) for June delivery rose 63 cents to settle at $50.13 a barrel on the New York Mercantile Exchange (search), bouncing off an intraday low of $48.80. Gasoline futures rose 0.7 cent to close at $1.4664 a gallon, rebounding from an intraday low of $1.42. Heating oil futures climbed 1.85 cent to $1.24545 a gallon, coming off of an earlier low at $1.42.

"It's been a real roller coaster," said Andrew Lebow, senior vice president at brokerage Man Financial Inc., in New York.

Energy futures fell immediately after the government released its weekly supply data, but they reversed course, Lebow said, as a result of short-covering, in which traders who had banked on even lower prices were forced to cover their bets, pushing prices higher.

There is also a view in the market — not shared by Lebow — that the Organization of Petroleum Exporting Countries (search) will not be able to keep up with an anticipated surge in demand later this year.

"Fourth quarter demand has become a preoccupation of the market," Lebow said.

In London, Brent crude futures rose 45 cents to $50.97 per barrel on the International Petroleum Exchange (search).

The latest petroleum supply snapshot from the U.S. Department of Energy (search) showed a 2.6 million barrel increase in crude oil last week, bringing the nation's inventories to 327 million barrels, or 9 percent above year ago levels.

The supply of gasoline grew by 2.2 million barrels to 213.5 million barrels, or 6 percent above year ago levels.

"The U.S. gasoline market is showing marked signs of improvement for consumers," the Energy Department said in its weekly analysis.

Indeed, while retail gasoline prices are about 22 percent higher than a year ago at $2.24 per gallon, Nymex gasoline futures are trading about 25 cents below their April 1 peak, auguring lower prices at the pump.

Oil analyst Tim Evans at IFR Energy Services in New York said there is plenty of crude oil and gasoline in the market, and that traders and speculators are downplaying these supply-demand fundamentals. He said what's keeping oil prices high is "a near-religious belief that although the market is not tight now, it will be later."

"Where is this tightness they're talking about?" Evans said.

Energy Department data show that gasoline demand rose by 0.8 percent in April, compared with a year ago. That's down from the 1.7 percent increase registered in March and a signal to Evans and others that motorists may be driving less as a result of the high pump prices.

Crude futures remain about 28 percent above year ago levels even after falling sharply from their intraday high of $58.28 in early April. Oil prices would need to surpass $90 a barrel to exceed the inflation-adjusted high set in 1980.

The recent downward pressure on prices has coincided with evidence of slower economic growth in the United States.

Last week the Commerce Department (search) said the economy grew at an annual rate of just 3.1 percent in the first quarter, the slowest pace of expansion in two years, in part because of high energy prices and reduced spending by consumers and businesses.

On Tuesday, the U.S. Federal Reserve (search) raised interest rates to curb spending as overall consumer prices spiked by 0.6 percent in March, driven by expensive gasoline and energy products. The move could further slow growth in the world's largest economy, reducing demand for oil, traders said.