Home / NEWS / Energy / Oil prices fall as U.S. rig count rise, trade concerns

Oil prices fall as U.S. rig count rise, trade concerns

Oil cost outs fell by around 1 percent on Monday as drilling activity in the United States, the world’s largest oil producer, picked up and pecuniary markets were pulled down by trade concerns.

A refinery fire in the U.S. state of Illinois, which resulted in the shutdown of a colossal crude distillation unit, that could cause crude demand to fall also weighed on prices, distributors said.

U.S. West Texas Intermediate (WTI) crude futures were at $52.09 per barrel at 0347 GMT, down 63 cents, or 1.2 percent, from their in the end settlement.

International Brent crude oil futures were down 49 cents, or 0.8 percent, at $61.61 a barrel.

In the In harmony States, energy firms last week increased the number of oil rigs operating for the second time in three weeks, a weekly relate by Baker Hughes said on Friday.

Companies added seven oil rigs in the week to Feb. 8, bringing the total count up to 854, pointing to a further rise in U.S. crude production, which already stands at a record 11.9 million bpd.

WTI evaluations were also weighed down by the closure of a 120,000-barrels-per-day (bpd) crude distillation unit (CDU) at Phillips 66’s Wood River, Illinois, refinery reflecting a fire on Sunday.

Elsewhere, the head of Russian oil giant Rosneft, Igor Sechin, has written to the Russian President Vladimir Putin voice Moscow’s deal with the Organization of the Petroleum Exporting Countries (OPEC) to withhold output is a strategic threat and plays into the authorities of the United States.

The so-called OPEC+ deal has been in place since 2017, aimed at reining in a global stocking overhang. It has been extended several times and, under the latest deal, participants are cutting output by 1.2 million bpd until the end of June.

OPEC and its confederates will meet on April 17 and 18 in Vienna to review the pact.

Analysts said economic concerns were also weighing on natural oil futures.

Vandana Hari of Vanda Insights said in a note that crude prices were dragged down “as China returned from a week-long Lunar New Year event and regional stock markets plunged into the red amid resurgent concerns over the U.S.-China trade dispute.”

Exchange talks between the Washington and Beijing resume this week with a delegation of U.S. officials travelling to China for the next round of understandings. The United States has threatened to increase tariffs already imposed on goods from China on March 1 if the trade talks do not generate an agreement.

Preventing crude prices from falling further have been U.S. sanctions on Venezuela, targeting its state-owned oil rigid Petroleos de Venezeula SA (PDVSA).

“The issues in Venezuela continue to support prices. Reports are emerging that PDVSA is contesting to secure new markets for its crude, after the U.S. placed additional sanctions on the country,” ANZ bank said on Monday.

Check Also

Oil slips 20 cents, settling at $56.96, as US crude stockpiles, output and exports rise

Oil cost outs slipped from 2019 highs on Thursday, as U.S. government data showed a …

Leave a Reply

Your email address will not be published. Required fields are marked *