Investing.com -- Crude futures eased on Friday, settling just below $50 a barrel, as long-term supply concerns remained in focus ahead of Memorial Day Weekend, the official start to the summer driving season.
On the New York Mercantile Exchange, WTI crude for June delivery traded in a broad range between $48.70 and $49.47 a barrel before settling at $49.27, down 0.21 or 0.42% on the session. On the Intercontinental Exchange (ICE), brent crude for July delivery wavered between $48.70 and $49.55 a barrel, before closing at $49.22, down 0.37 or 0.75% on the day. With one session left in May, both the international and U.S. benchmarks are up more than 10% for the month.
Brent traded at a 0.05 discount against WTI at Friday's close of trading, down slightly from Thursday's close when it traded at a 0.10 premium. Earlier this week, the front month contract for North Brent sea futures slipped below WTI for the first time in months.
Crude prices were relatively unaffected by reports of a slight decline in U.S. oil rigs last week, providing further indications that top energy companies are still hesitant to reinvest in drilling operations even as oil hovers near 7-month highs. One session earlier, oil hit $50 a barrel for the first time in 2016, amid continued production slowdowns in Nigeria and signals of increased demand in Asia. On Friday afternoon, oil services firm Baker Hughes said in its weekly rig count report that U.S. oil rigs fell by two to 316 for the week ending on May 20. A week earlier, the domestic oil rig count stabilized, marking the first time in nine weeks the oil rig total did not move lower. The rig count stood at 646 at this time last year, representing a 36% increase from the current level. Meanwhile, the combined Oil and Gas rig count stayed flat last week at 404, as gas rigs rose by 2 to 87.
Energy traders continued to monitor developments in Nigeria, one day after the Niger Delta Avengers, a Southern Nigerian insurgent group, claimed responsibility for an explosion that shut down operations at a Chevron Corporation (NYSE:CVX) facility. As fighting between rogue terrorist factions persist, a series of production halts at key operational facilities have dragged Nigerian output below 1.2 million barrels per day, according to Platts. At current levels, crude production in Nigeria remains near 20 year lows.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, extended gains following relatively hawkish remarks by Federal Reserve chair Janet Yellen on Friday afternoon. At a closely-watched speech in Cambridge, Mass., Yellen indicated that it could be appropriate for the U.S. central bank to lift rates in the coming months if the economy and the labor markets continue to show improvement. The index, which has crashed 4% since early-December, surged more than 0.60% in Friday's session to an intraday-high of 95.76.
Also on Friday, AAA said in its Daily Fuel Gauge Report that the average price of gasoline per gallon stood at $2.32, 0.40 below their level 52 weeks ago. While U.S. gas prices have crept up to 2016-yearly highs, they are still at their lowest level on Memorial Day Weekend in a decade. Approximately 34 million Americans are traveling this weekend, according to AAA.
Despite the recent upswing in oil prices, crude is still down by more than 50% from its level in June, 2014, when it peaked at $115 a barrel.