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Oil prices fell on Thursday on concerns about oversupply amid a slowing global economy, although strong U.S. gasoline demand helped limit losses.

The lack of any immediate action by the world's largest exporters to follow through on a proposal to freeze production at January's levels also continued to undermine the market.

In a sign of the excess supply, U.S. crude stockpiles rose 3.5 million barrels last week to an all-time peak above 507 million barrels, data from the Department of Energy showed on Wednesday.

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A slowing global economy also risks hurting demand for oil and keeping prices very low.

Citi cut its forecast for global economic growth this year to just 2.5 percent, from a previous forecast of 2.7 percent.

"Global growth prospects are worsening further, with deterioration across advanced economies alongside previous weakness in emerging markets," Citi economists said in a research note.

A boost for oil prices after Saudi Arabia, Russia, Venezuela and Qatar last week proposed to keep their output unchanged from January, provided other major OPEC and non-OPEC producers joined them, has since faded.

Iran has already branded the idea "a joke", while Iraq, one of the largest contributors to rising OPEC output, has said it supports the freeze, but its production will continue to rise.

"The underlying fundamentals are still bearish and the market is reacting this morning," PVM Oil Associates Tamas Varga said.