Investing.com -- Crude futures pared some gains on Friday, as the dollar softened in response to weaker than expected U.S. jobs data and the domestic rig count slid to fresh all-time record low, providing further signals of sharp declines in production over the next several months.
On the New York Mercantile Exchange, WTI crude for June delivery traded in a broad range between $43.55 and $45.33 a barrel, before settling at $44.59, up 0.27 or 0.61% on the session. WTI closed the week with back-to-back winning sessions, to recoup some losses from a three-day losing streak when the front month contract for U.S. crude opened the month by slumping nearly 6%. On the Intercontinental Exchange (ICE), brent crude for July delivery wavered between $44.20 and $46.11 a barrel, before closing at $45.30, up 0.30 or 0.67% on the session.
Both Brent and WTI ended the week down by approximately 2%, suffering one of their worst weekly performances since mid-February. Last week, the international and U.S. domestic benchmarks ended April by hitting fresh 2016-yearly highs.
On Friday afternoon, oil services firm Baker Hughes said in its weekly rig count report that oil rigs in the U.S. fell by four to 328 for the week ending on April 29. The rig count has moved lower in each of the last seven weeks. At the same time,combined oil and gas rig count declined by five to 415, touching down to a fresh all-time low. Major reductions among U.S. oil rigs typically provide lagging indications that domestic production is about to level off.
Earlier this week, the U.S. Department of Energy reported that nationwide production fell by 113,000 barrels per day for the week ending on April 29, marking the strongest weekly decline since last July. Domestic output in the U.S. has now fallen in 11 consecutive weeks, dropping to 8.825 million bpd, its lowest level since September, 2014. It comes amid reports that OPEC production in April surged to 32.64 million bpd, just 0.1 million bpd from all-time record highs four months ago. OPEC production is expected to remain relatively steady until the world's largest oil cartel convenes for a highly-anticipated meeting on June 2 in Vienna.
Although U.S. crude futures have bounced off mid-February lows of $26.05 a barrel, oil prices are still down by more than 60% from their peak of $115 in June, 2014.
Elsewhere, investors continued to monitor production levels throughout Canada, as wildfires continued to rage throughout Alberta. On Friday, Canadian energy company Suncor told UPI that it closed down operations at its plant in Fort McMurray as the town's 88,000 residents evacuated the area. Oil prices worldwide gained 1% a day earlier, amid reports that the disaster forced approximately 640,000 barrels offline. In total, as much as 1 million barrels of Canadian oil could be taken offline temporarily, the Wall Street Journal reported.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.20% to an intraday low of 93.22 after the Labor Department reported that nonfarm payrolls last month rose by its slowest pace in seven months. The index is down more than 6% since early-December.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.