SINGAPORE (Reuters) – Oil prices fell by about 1 percent on Monday as drilling activity in the US, the world's largest oil producer, picked up, and financial markets were dragged down by trade problems.
FILE PHOTO: An oil pump power pumps oil in a field near Calgary, Alberta, Canada on July 21
A refinery fire in the US state of Illinois, resulting in the Interruption of a large raw distillation unit that could cause raw demand to fall also weighted on prices, traders said.
U.S. The Western Texas Intermediate (WTI) raw futures were at $ 52.09 per. Barrel at 0347 GMT, down 63 cents, or 1.2 percent, from their final settlement.
International Brent crude futures were down 49 cents, or 0.8 percent, at $ 61.61 per barrel.
In the United States, energy companies last week increased the number of oil rigs operating for the second time in three weeks, a week's report by Baker Hughes said Friday.
Companies added seven oil rigs in the week to February 8, bringing the total to 854, suggesting a further increase in US crude production, already on a record 11.9 million bpd.
WTI prices were also weighed at the closure of a 120,000 barrels per barrel. Day (bpd) crude distillation unit (CDU) in Phillips 66s Wood River, Illinois, refinery after a fire on Sunday.
Elsewhere, the head of Russian oil giant Rosneft, Igor Sechin, written to Russian President Vladimir Putin to say Moscow's agreement with the Oil Exporting Organization (OPEC) to detain production is a strategic threat and plays in hands in the US.
The so-called OPEC + agreement has been in place since 2017 with the purpose of cleaning in a global supply cover. It has been expanded several times, and ultimately the participants are reducing production by 1.2 million bpd until the end of June.
OPEC and its allies meet on 17 and 18 April in Vienna to review the pact.
Analysts said economic concerns also weigh on crude oil futures.
Vandana Hari from Vantaa Insights said in a note that crude prices were being pulled down "when China returned from a week-long New Year's holiday and the regional stock markets fell into the red with resurrected concerns over the US-China trade outlook."
Trade negotiations between Washington and Beijing resume this week with a delegation of US officials traveling to China for the next round of negotiations. The United States has threatened to increase tariffs already imposed on goods from China on 1 March if trade negotiations do not provide for.
Prevention of the crude price falls further, US sanctions against Venezuela have been directed at the state-owned oil company Petroleos de Venezeula SA (PDVSA).
"The problems in Venezuela continue to support prices. There are reports that PDVSA is distorting to secure new markets for its commodity after the US has imposed further sanctions against the country," said the ANZ bank on Monday.
(GRAFISK: US Oil Production and Drilling Levels – tmsnr.rs/2Tm4u4I)
Reporting by Henning Gloystein; Editing by Joseph Radford and Christian Schmollinger