Oil futures retreated after rising over $58 a barrel yesterday on worries of rising demand that will exceed available output resources.

Today May oil futures fell $0.45 to $56.56 a barrel.

Worries persists despite the fact that OPEC recently raised its output to add another 500,000 bpd to its quota of 27.5 million barrels a day set at March 16 meeting, and de-facto the cartel is pumping more.

The US government report for the past week is likely to show a rise in US crude oil inventories, in what would be an eighth consecutive weekly rise.

``There is a perception that the oil bubble is ready to burst,’’ said Jason Kenney, an analyst at ING Financial Markets in Edinburgh. ``OPEC has reacted and is opening the taps. Supply is keeping pace with demand and there’s an outlook for oversupply in the second quarter.’’

Sheikh Ahmad Fahd al-Sabah of Kuwait said on April 2 that the actual OPEC production probably hovers around 28 million barrels a day,and the cartel may step up its quotas for the second time this year in ongoing talks. The rise in second-quarter quotas is nearly agreed upon. The increased output in the next quarter when demand typically ebbs off, may help to build stockpiles that will serve as a buffer against surges in demand.

In addition, global economies seem to be slowing down in response to a surge in oil prices, yesterday’s report from the European Commission shows as the commission lowered its forecast for 2005 growth for the second time as oil costs rise.