Six Chevron Corp oil wells being readied for hydraulic fracturing stand in the Permian Basin near Midland, Texas. Oil fell as US drillers resumed their drilling binge. Image Credit: Bloomberg

Tokyo: Oil slipped as US explorers resumed their drilling binge, raising concerns over whether output cuts by Opec and its allies will be enough to clear a glut despite a pledge from Russia that it’s committed to the curbs.

Futures in New York fell 0.3 per cent after data showed American producers added working oil rigs for the seventh time in eight weeks. Output also continued to grow, touching a record 10.4 million barrels a day last week.

Meanwhile, Russia’s assurance that the world’s biggest crude producer will prolong production cuts into 2019 if necessary failed to assuage fears over surging US supplies.

Oil has been trading in a tight range near $60 (Dh220) this month as investors assess a shale boom, concerns about a trade war sparked by US President Donald Trump and expectations that Venezuelan output will plunge. Rising American crude production is prompting speculation that a deal between Opec and its partners would need to be extended well into 2019 to reach the group’s goal of reducing inventories to their five-year average.

“There are signs that US crude production continues to be steady, and that will offset Opec’s effort to some extent,” Takayuki Nogami, chief economist at state-backed Japan Oil, Gas & Metals National Corp., said by phone from Tokyo. Still, “oil prices are underpinned by Russia’s comment that raised expectations Opec and some non-OPEC producers will keep commitment to supply cuts to the end.”

West Texas Intermediate for April delivery, which expires on Tuesday, fell as much as 38 cents to $61.96 a barrel on the New York Mercantile Exchange and traded at $62.14 at 4:28pm in Tokyo. The contract rose $1.15 to $62.34 on Friday, driving futures to a 0.5 per cent weekly gain. Total volume traded was about 43 per cent below the 100-day average.

Brent for May settlement fell 25 cents to $65.96 a barrel on the London-based ICE Futures Europe exchange. The contract climbed $1.09, or 1.7 per cent, to $66.21 on Friday. The global benchmark traded at a $3.77 premium to WTI for the same month.

Russia is committed to seeing the pact through to completion, whether that means starting discussions about an exit strategy at the next meeting in June or prolonging the cuts into 2019, Energy Minister Alexander Novak said in a Bloomberg Television interview in Moscow. When the time is right to end the production curbs, he said it should be done gradually, echoing comments from his Saudi counterpart earlier this month.

Investors also weighed the US’s rising presence in oil markets even as Russia’s Novak said he isn’t worried about the growth in shale. US crude explorers added four working rigs last week, bringing the total to 800, according to Baker Hughes data released Friday.