Crude oil edged up on worries about the potential supply crunch at the end of the year despite an optimistic US government report. The markets are worried about OPEC’s ability to meet surging demand as the cartel is already pumping close to its full capacity.

In New York oil rose to $50.39.

``Crude oil prices will remain high because everybody knows that OPEC hardly has any spare capacity to raise output, while demand for crude oil from China and India continue to rise,’’ said P. Sugavanam, director of finance for Indian Oil Corp.

The report by the U.S. Energy Department revealed larger-than-expected increases in the nation’s gas and crude oil stocks. Crude supplies added 2.68 million barrels, almost twice of what the analysts expected, to bring the stockpiles to 327 million barrels, which is the highest level since July 1999. This is also 9% higher than last year’s levels.

Gasoline stockpiles added 2.2 million barrels to end at 213.5 million last week, in their first increase in three weeks.

However, worries about long-term supply crunch are mounting and can be expected to raise the price ahead of raised consumption in the US driving season that peaks on Memorial Day

``This is just one week’s report,’’ said Mike Armbruster, co- founder of Altavest Worldwide Trading Inc. in Laguna Hills, California. ``We are in a long-term bull market and the current correction is simply a buying opportunity.’’

According to the International Energy Agency, global oil consumption is projected to add 2.1 percent in 2005 and reach an all-time high in the fourth quarter with 86.1 million barrels a day.