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Oil prices fall on rising U.S. rig count, Illinois refinery outage

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - Oil prices fell on Monday as drilling activity in the picked up and a refinery fire in the U.S. state of resulted in the shutdown of a large crude distillation unit.

Concerns about faltering economic growth curbing fuel demand also weighed on oil markets, traders said.

U.S. Intermediate (WTI) crude futures were at $52.17 per barrel at 0750 GMT, down 55 cents, or 1 percent, from their last settlement.

International Brent were down 27 cents, or 0.4 percent, at $61.83 a barrel.

In the United States, increased the number of operating for the second time in three weeks, a weekly report by said on Friday.

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

WTI prices 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 following a fire on Sunday.

Elsewhere, the of Russian Rosneft, Igor Sechin, has written to the Russian saying Moscow's deal with the Organization of the Petroleum Exporting Countries (OPEC) to withhold output is a strategic threat and plays into the hands of the

The so-called OPEC+ deal has been in place since 2017, aimed at reining in a global supply 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 allies will meet on April 17 and 18 in to review the pact.

"I don't think will just ... pull out of the OPEC+ agreement ... but I wouldn't be surprised at all if the cuts by certain non-members of the cartel are wound down over the course of the year," said Matt Stanley, a with in

Analysts said economic concerns were also weighing on

of said in a note that crude prices were dragged down "as returned from a week-long Lunar New Year holiday and regional stock markets plunged into the red amid resurgent concerns over the U.S.-trade dispute".

Trade talks between the and resume this week with a delegation of U.S. officials travelling to for the next round of negotiations. The has threatened to increase tariffs already imposed on goods from China on March 1 if the trade talks do not produce an agreement.

Preventing crude prices from falling further have been U.S. sanctions on Venezuela, targeting its firm Petroleos de (PDVSA).

"The issues in continue to support prices. Reports are emerging that is scrambling to secure new markets for its crude, after the U.S. placed additional sanctions on the country," said on Monday.

(Reporting by Gloystein; Editing by and Christian Schmollinger)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, February 11 2019. 13:39 IST