Crude oil hovers around the four-month high of $51 a barrel. The price is slightly lower after OPEC signalled that it may take action if the price soars higher.

Crude for April delivery was trading at $50.92 a barrel at the New York Mercantile Exchange.

Sheikh Ahmad Fahd al-Ahmad al-Sabah said in Kuwait today that OPEC might step up production if prices continue to rise.

``Kuwait is playing OPEC’s game of the past two months of keeping prices within a high range of $45 to $50’’ in New York, said Peter Luxton, an Informa Global Markets analyst in London. ``In the long term, it’s in their interest not to let prices run to extremely high levels and lose control of the market. The rally isn’t built on particularly firm foundations anyway.’’

Analysts believe that U.S. Energy Department report that is due tomorrow at 10:30 a.m. in Washington is likely to show an increase of 1.3 million barrels in U.S. crude oil inventories. The increase in gasoline stockpiles is likely to hover around 1.5 million barrels.

``If you get a fairly good increase in crude and gasoline, the rally in prices might get punched,’’ Informa Global’s Luxton said. ``I would be surprised if prices didn’t top out at current levels. It looks pretty much as a short-term bubble with cold weather providing an excuse for funds looking for protection from the dollar’s drop to get into commodities and oil.’’

Colder-than-normal weather is driving oil prices up amid concern on US heating oil inventories that are below last year’s levels. The unusual cold spell in Europe is set to last over next week, while the US is forecast to recover from the unusually cold weekend.

The rapid overnight movement in the US currency also contributed to the rise in oil prices.