UPDATE 8-Oil extends losses as Texas prepares to ramp up output after freeze

* Texas oil companies prepare for production restart
* Oil demand outlook weakened by U.S. refinery deep freeze
outages
* U.S.-Iran relations thaw but 'long road' ahead
* U.S. oil rigs fell by one to 305 this week - Baker Hughes

(Updates to settlement)
By Devika Krishna Kumar
NEW YORK, Feb 19 (Reuters) - Oil prices fell for a second
day on Friday, retreating further from recent highs, as Texas
energy companies began preparations to restart oil and gas
fields shuttered by freezing weather and power outages.
Brent crude futures LCOc1 ended the session down $1.02, or
1.6%, at $62.91 a barrel while U.S. West Texas Intermediate
(WTI) crude CLc1 fell $1.28, or 2.1%, to settle at $59.24.
For the week, Brent gained about 0.5% while WTI fell about
0.7%.
This week, both benchmarks had climbed to the highest in
more than a year.
"Price pullback thus far appears corrective and is slight
within the context of this month's major upside price
acceleration," said Jim Ritterbusch, president of Ritterbusch
and Associates.
Unusually cold weather in Texas and the Plains states
curtailed up to 4 million barrels per day (bpd) of crude
production and 21 billion cubic feet of natural gas, analysts
estimated.
U.S. energy firms this week cut the number of oil rigs
operating for the first time since November, according to Baker
Hughes data. Texas refiners halted about a fifth of the nation's oil
processing amid power outages and severe cold.
Companies were expected to prepare for production restarts
on Friday as electric power and water services slowly resume,
sources said. "While much of the selling relates to a gradual resumption
of power in the Gulf coast region ahead of a significant
temperature warmup, the magnitude of this week's loss of supply
may require further discounting given much uncertainty regarding
the extent and possible duration of lost output," Ritterbusch
said.
Oil prices fell despite a surprise drop in U.S. crude
stockpiles last week, before the big freeze hit. Inventories
fell 7.3 million barrels to 461.8 million barrels, their lowest
since March, the Energy Information Administration reported on
Thursday. EIA/S
"Vaccines and the impressive rollouts we've seen have
delivered strong gains, as have the efforts of OPEC+ - Saudi
Arabia, in particular - and the big freeze in Texas, which gave
oil prices one final kick this week," Craig Erlam, senior market
analyst at OANDA, said. "With so many bullish factors now priced in, it seems we're
seeing some of these positions being unwound."
The United States on Thursday said it was ready to talk to
Iran about returning to a 2015 agreement that aimed to prevent
Tehran from acquiring nuclear weapons. Still,
analysts did not expect near-term reversal of sanctions on Iran
that were imposed by the previous U.S. administration.
"This breakthrough increases the probability that we may see
Iran returning to the oil market soon, although there is much to
be discussed and a new deal will not be a carbon-copy of the
2015 nuclear deal," said StoneX analyst Kevin Solomon.