Oil prices fall on rising U.S. rig count, pressure on OPEC-led supply cuts

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© Reuters. FILE PHOTO: An oil pump jack pumps oil in a field near Calgary© Reuters. FILE PHOTO: An oil pump jack pumps oil in a field near Calgary

By Henning Gloystein

SINGAPORE (Reuters) – Crude prices fell by around 1 percent on Monday as U.S. drilling activity picked up and as Russia’s biggest oil producer pressured President Vladimir Putin to end the supply cut deal with Middle East-dominated producer club .

U.S. West Texas Intermediate (WTI) crude futures were at $52.16 per barrel at 0103 GMT, down 56 cents, or 1 percent, from their last settlement.

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.

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International futures were down 53 cents, or 0.9 percent, at $61.57 a barrel.

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

Companies added 7 oil rigs in the week to Feb. 8, bringing the total count to 854, pointing to a further rise in production, which already stands at a record 11.9 million bpd.

(For a graphic on ‘U.S. oil drilling & production levels’ https://tmsnrt.rs/2S87iVI)

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

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

OPEC and its allies will meet on 17-18 in Vienna to review the pact.

Preventing crude prices from falling much further have been U.S. sanctions on Venezuela, targetting its state-owned oil firm PDVSA.

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

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Source: Investing.com