Oil prices regain some ground, but oversupply weighs

OPEC Nations Are In Trouble If Oil Doesn't Get Back To $60 Per Barrel

Gasoline stockpiles climbed 1.54 million barrels last week, surprising analysts surveyed by Bloomberg who projected the Energy Information Administration data would show a 2-million-barrel decrease.

May West Texas Intermediate crude shed 24 cents, or 0.5%, to settle at USD52.41 a barrel.

A surge in USA production is a major threat to OPEC's effort to reset the still-oversupplied global oil market.

More barrels could be on their way to market from US shale fields as financial companies are investing billions in production, a Reuters analysis showed.Members of the Organization of the Petroleum Exporting Countries are cutting oil production by 1.2 million bpd from January 1 for six months, the first reduction in eight years.

Gasoline stocks also posted a counter-seasonal build of 1.4 MMbbl.

"As long we do not get any negative surprises in terms of demand, the price is likely to settle back into its recent range with the upside still capped", Ole Hansen, the head of commodity strategy at SaxoBank, said in a semi-regular newsletter.

Oil prices are on pace for their biggest daily percentage decline since early March, and US crude oil production is expected to rise in both 2017 and 2018.

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Output from the Permian play, the country's largest shale region, was expected to reach a record 2.36 million bpd.

Oil steadied on Wednesday after OPEC said it was committed to eroding a global supply overhang that has dogged markets since 2014, but with USA output and inventories rising, analysts said prices looked vulnerable.

A similar sentiment was expressed Monday in the face of positive forecasts by Andrew Lipow, president of Lipow Oil Associates: he told Reuters, "While the Saudis and the Russians have been complying with their cuts, we've seen Iraq and a number of other countries produce more than their share of the quota".

Global fuel stocks are well above the five-year average, and Saudi Energy Minister Khalid al-Falih was quoted on Thursday as saying inventories remained elevated in part because traders were selling supplies out of tanker storage.

U.S. stockpiles and production have cast doubt on whether the OPEC cuts were enough.

The market will watch Wednesday morning to see if US government data confirms the API report.

Many U.S. sanctions against Iran were lifted in late 2015 under a nuclear deal, allowing Tehran to more than double its crude exports over 2016, adding to the global overhang.

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