Oil prices flat in choppy trade, rising USA production weighs

Oil recovers some lost ground but market under pressure

Oil recovers some lost ground but market under pressure

Data from the American Petroleum Institute showed on Tuesday that although crude inventories fell by 840,000 barrels in the week to April 14, they remained near record highs.

Oil prices fell in thin trade on Tuesday after the Easter holiday break shut many markets for as long as four days and as a US government report indicated rising production.

U.S. government drilling data showed shale production next month was set to rise to 5,19 million barrels per day (bpd), with output from the Permian play, the largest USA shale region, expected to reach a record 2,36 million bpd.

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

U.S. West Texas Intermediate crude futures were also down 47 cents at $52.71 a barrel.

"The glaring rise in USA gasoline refined product inventories, in combination with persistent lower-48 production growth, keeps us cautious on oil prices", said Chris Kettenmann, chief energy strategist at Macro Risk Advisors LLC in NY. That surprise build in gasoline, along with an increase in USA production, pressured prices.

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"Rising oil output in the USA remains the predominant bearish factor for prices despite growing anticipation that OPEC will extend a self-imposed cap on its oil production in the upcoming May meeting", Abhishek Kumar, senior energy analyst at Interfax Energy Global Gas Analytics said recently.

Oil markets are on path to recovery due to measures taken by Opec and non-Opec members to cut production by 1.8 million barrels per day from January this year, secretary general of Opec said at the third GCC petroleum media forum that kicked off in Abu Dhabi on Wednesday. WTI was trading 30 cents lower at $52.35 a barrel on the New York Mercantile Exchange at 10:34am London time on Tuesday.

At a press conference in the United Arab Emirates, Saudi Energy Minister Khalid al-Falih said that "there is consensus building but it's not done yet".

USA shale production is ramping up aggressively. John Saucer, vice president of research and analytics at Mobius Risk Group in Houston, said the market was not jittery, noting low volatility and weak oil prices, which he said doesn't "really signal a market that's too concerned about geopolitical hotspots".

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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