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Oil prices swelled to the highest levels since March 1.

Benchmark Brent crude futures were down 49 cents at $55.40 at 0310 GMT.

With financial markets closed across Europe, the focus was on geopolitical tensions.

Shares of Incyte Corp plunged more than 11 percent to $124.89 in early trading, while Eli Lilly dropped 5.3 per cent after the U.S. FDA declined to approve a new drug for rheumatoid arthritis made by the two companies.

Increasing U.S. crude output has undermined efforts by the Organization of the Petroleum Exporting Countries and other producers to curb output and reduce a glut that has depressed prices.

Crude prices have notched three straight weeks of gains to recover from the slump in March, when prices fell to a four-month low of $47.01, on the back of concerns that a ramp up in US oil production would dampen OPEC's efforts to drain the glut in supply.

U.S. West Texas Intermediate crude futures were also down 47 cents at $52.71 a barrel. The Opec and IEA monthly reports broadly provided a mixed picture but both emphasized better compliance to output cuts in March which is price supportive.

$60 barrel prices would allow for additional investment in the worldwide energy sector, without allowing the United States' shale producers too much additional financial leverage to undo the effects of the output cuts.

Fighting in Libya has cut oil output, but state oil company National Oil Corporation has reopened at least one field. "If I were OPEC, I'd be pretty anxious".

Meanwhile, oil producers in the USA added rigs for a 13th straight week, proof that output increases there will continue unhampered. The official inventory report, courtesy of the U.S. Energy Information Administration (EIA), will be released the following morning.

"U.S. shale oil producers, particularly in the Permian basin, seem well convinced that they can make money at current prices and we're in no position to argue", Timothy Evans, a Citi Futures analyst said in a recent note.

China on Monday reported first quarter GDP rose 1.3% on the quarter compared to the same period a year ago for an annual pace of 6.9%, beating expectations for the year comparison.

In addition, the possible Opec deal extension to extend the production output cut to beyond June 2017 would likely give support to oil prices.