Investing.com -- Crude ticked up on Thursday paring early gains, as dangerous wildfires threatened oil sands production in Canada and a stand-off in Libya impacted the nation's already depleted supply, providing short-term upside pressure for global oil prices.
On the New York Mercantile Exchange, WTI crude for June delivery traded in a broad range between $43.97 and $46.02 a barrel, before settling at $44.34, up 0.56 or 1.28% on the session. WTI rallied on Thursday to halt a three-day losing streak when U.S. crude futures opened the month by slumping nearly 6%. On the Intercontinental Exchange (ICE), brent crude for July delivery wavered between $44.66 and $46.76 a barrel, before closing at $45.02, up 0.40 or 0.90% on the session.
Both the international and U.S. domestic benchmarks of crude hit fresh 2016-yearly highs last week, closing April more than 50% above their lows from mid-February.
Crude prices rebounded in Thursday's session as massive wildfires in Alberta headed south, forcing additional evacuations in Canada's sixth-largest province. Earlier on Thursday morning, officials in Fort McMurray, a small town in Northeastern Alberta, declared a State of Emergency, forcing all 88,000 of its residents to evacuate the area. As of early Thursday afternoon, nearly 1,600 structures were damaged and 18,500 acres in the area were destroyed, CNBC reported.
The raging fires limited production and shut down a number of major pipelines in Northwest Canada, sending 640,000 barrels offline, Reuters reported. In 2015, Canada pumped an average of 4.4 million barrels per day, according to the U.S. Energy Information Administration (EIA), fifth-highest in the world. In recent months, Canadian output has dipped below 4.0 million bpd amid persistently low prices.
"While operations are currently far from the fires, we have shut down our production at our Shell (LON:RDSa) Albian Sands mining operations so we can focus on getting families out of the region," Shell said in a statement.
In Libya, meanwhile a stand-off between Eastern and Western rivals continued limiting exports out of the Mediterranean Sea. It came one day after an official in Tripoli told Reuters that the Benghazi-backed National Oil Corporation prevented a Glencore (LON:GLEN) cargo tanker from loading, disrupting the outflow of 120,000 barrels of crude.
Meanwhile, energy traders continued to digest a sharp decrease in U.S. production last week of 113,000 barrels per day – 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. At the same time, crude stockpiles rose by 2.8 million barrels last week to 543.4 million, remaining at historically high levels for this time of year. Crude inventories nationwide are close to reaching full storage full-capacity.
Despite the recent upswing, crude futures are still down by more than 60% from their peak of $115 a barrel in June, 2014.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.55% to an intraday high of 93.86. Despite the gains, the index is still down by more than 6% since early-December. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.