Rise in US Rig Count and Due to Fire at Illinois Refinery led Oil prices to Drop Further

On Monday, when the US drilling operation picked up and as the refinery caught fire at the state of Illinois of the U.S which affected the operation, further resulting in the shutdown of a large crude distillation unit. Due to which the oil prices fell by more than 1 percent.

Baker Hughes published a weekly report on Friday stating that a week before the energy companies in the United States had increased the oil rigs which was functioning for another time within three weeks.

Seven more oil rigs were included by the companies until February 8 within a week, making it to 854 altogether which increased the production of crude oil in the U.S that is almost at a record high at 11.9 million bpd.

The International Brent crude oil noticed a drop on Monday by 71 percent at $61.39 a barrel or drop by 1.1 percent.

On the same day, the U.S West Texas Intermediate [WTI] crude futures were also dropped by 80 percent at $51.92 a barrel or 1.5 percent drop at 0144 GMT as per their previous settlement.

On Sunday, following a fire in crude distillation unit in Illinois at the Philips 66’s Wood River, the oil prices of WTI further fell down closure to 120,000 barrels per day [bpd].

Due to the control over the global supply overhang, from 2017 onwards the Organization of the Petroleum Exporting Countries [OPEC] + deal was in position. The deal was prolonged many times, and as per the recent deal, partners are reducing their output by around 1.2 million bpd and will continue to do so up to June.

A letter has been drafted by Igor Sechin, the head of Russian oil giant Rosneft to the Russian President Vladimir Putin stating about the Moscow’s deal with the Organization of the Petroleum Exporting Countries [OPEC] that the holding the output is a threat and is in the interest of the United States.

To examine the matter, the meeting of OPEC and its associates will take place in Vienna on April 17 and 18.

Permission on Venezuela is approved by the United States to stop crude oil prices from falling further by aiming at PDVSA a state-owned oil company of U.S.

On Monday, ANZ bank mentioned that, amidst problems in Venezuela, they continue to back the crude oil prices. Reports are stating that, ever since the United States imposed additional sanctions on Venezuela, the PDVSA is struggling to safeguard its crude oils over the new markets.

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