Prices fall on fears of USA drillers counteracting OPEC cuts

Russia, the largest of the 11 outside producers working with OPEC, has not publicly said whether it supports extending the supply cut, but is wary about the revival of US shale output due to higher oil prices. Saudi Arabia pledged to cut production to 10.058 million barrels a day under the deal.

Traders said that prices came under pressure from rising USA drilling and ongoing high supplies by the Opec despite its pledge to cut output by nearly 1.8 million barrels per day (bpd) together with some other producers like Russian Federation.

The deal has lifted oil prices, but inventories in industrial nations are rising and higher returns have encouraged US companies to pump more.

"The ministers will meet in May to decide, but everyone has to be on board", one OPEC source from a major producer said regarding the deal. Crude prices have fallen 8% over the last two weeks, the biggest weekly drop in four months, and some industry experts have suggested the decline could continue for some time yet.

U.S. West Texas Intermediate and global Brent crude oil finished slightly better on Friday, but light volume held the market in a tight range.

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The May contract of West Texas Intermediate crude oil futures, the USA benchmark of oil prices, fell 1.6% to $48.54 per barrel.

Given the increase of 14 drilling rigs last week as reported by Baker Hughes, the potential for increased USA production continues to build.

The price-gouging effort by the collection of oil-rich nations was meant to at least somewhat correct for two-and-a-half years of devastatingly low prices, which at times crippled the economies of Russia, Saudi Arabia and Nigeria, among others.

USA oil output has surged to over 9.5 million barrels per day from 8.5 million barrels per day in June of the previous year.

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