Oil prices claw back some losses, but oversupply still weighs

Oil prices claw back some losses, but oversupply still weighs

"The rebalancing in US crude stocks may have got underway, but concerns about further gasoline builds are rife even as the USA summer driving season shifts up a gear", said Stephen Brennock, an analyst with PVM Oil Associates.

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

Shale production in May was set for its biggest monthly increase in more than two years, according to the U.S. Energy Information Administration, as producers boosted drilling activity.

OPEC members Saudi Arabia and Kuwait signalled that the Organization of the Petroleum Exporting Countries and other producers, including Russian Federation, would likely extend their oil output cut beyond June. The industry body American Petroleum Institute had reported an increase of 2.254 million barrels in gasoline inventories on Tuesday, setting the stage for crude's slide.

West Texas Intermediate, the USA benchmark for the price of up, was up 0.08 percent to $52.45 per barrel.

Oil edged lower after a report showed USA gasoline supplies increased for the first time in nine weeks even as crude stockpiles dropped. They settled down 53 cents at $52.65 a barrel.

Oil prices regained some ground on Thursday after steep losses the previous day, with a slight drop in USA crude inventories stoking hopes that a global supply overhang might slowly retreat. A surprise build in gasoline inventories despite heavier refining activity, along with an increase in US crude production, largely pushed prices lower.

Oil-market news. Oil-exporting countries are moving closer toward ending a global glut and re-balancing the market, and OPEC will decide in May whether to extend production cuts, the group's Secretary-General Mohammad Barkindo said.

The Organization of the Petroleum Exporting Countries' kingpin Saudi Arabia said the cartel is likely to reach an agreement next month to extend its production cuts.

The Energy Minister of the United Arab Emirates said he saw healthy oil demand growth this year and believed inventories would fall, but it would take more time to rebalance the market.

Geopolitical concerns have also helped underpin oil.

The petrostates behind this cut are stuck behind a rock and a hard place-the hard place being the fiscal squeeze bargain oil is placing on their governments, and the rock being US shale production.

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.

Retail sales in the USA fell for a second straight month in March and consumer prices dropped for the first time in just over a year, official data showed on Friday.

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