Investing.com -- U.S. crude futures hit a fresh seven-month high on Friday before paring some of the gains, amid broad signals that supply disruptions in Nigeria, Canada and Libya are about to end and ominous comments from Russia's energy ministry casting doubt on the resolution of a coordinated output freeze between OPEC and Non-OPEC producers.
On the New York Mercantile Exchange, WTI crude for July delivery traded in a broad range between $47.95 and $49.28 a barrel before settling at $48.38, down 0.29 or 0.60% on the session. On the Intercontinental Exchange (ICE), brent crude for July delivery wavered between $48.08 and $49.38 a barrel, before closing at $48.70, down 0.15 or 0.31% on the day. Although North Sea brent futures remain near 2016-yearly highs, brent crude has yet to crack $50 a barrel on the calendar year – a level it last reached in early-November.
Both the international and U.S. benchmarks of crude are up by more than 15% since Saudi Arabia abruptly ended a highly-anticipated meeting in Doha in mid-April aimed at stabilizing persistently low global oil prices. Saudi Arabia, the world's largest exporter, left the summit after insisting that main rival Iran take part in any pacts involving a comprehensive production freeze. More broadly, U.S. crude has surged by more than 60% since falling to 13-year lows at $26.05 a barrel on February 11.
While oil prices continued to rise on Friday, there are some indications that the prolonged rally may have reached its peak. In Western Canada, a number of top oil companies appeared ready to resume production, as raging wildfires moved away from oil sands operations in the region. In Alberta, firefighters were aided by cool, damp temperatures which helped them keep conflagrations away from two major oil sand production facilities. Earlier this month, the devastating fires forced thousands of residents from their homes in Fort McMurray, Alberta, shutting down numerous pipelines into the U.S. Consequently, as much as 1.5 million barrel per day of oil was forced offline as several major companies halted operations.
"The threat definitely has diminished around the communities and the oil-sands facilities," said Chad Morrison, Alberta's Forest Ministry's Chief Wildfire Official, at a news conference in Edmonton. “We held the fire yesterday in all critical areas."
Elsewhere, Russia energy minister Alexander Novak said Friday that it is unlikely OPEC will reach a consensus on a coordinated output freeze when the 13-nation group meets at a semi-annual meeting on June 2 in Vienna. Last month, OPEC production rose by 15,000 to 32.251 million bpd, remaining near all-time record highs. Addressing reporters at a Black Sea resort in Sochi, Novak said global supply is currently exceeding demand by 1.5 million bpd – far above the pace forecasted by a number of leading analysts in the energy industry.
Oil services firm Baker Hughes said Friday in its weekly rig count that U.S. oil rigs were unchanged last week at 318, halting an 8-week streak of weekly declines. The combined Oil and Gas rig count for the week ending on May 13 fell by two to 404, dropping to the lowest level since the series was launched in 1947. Crude prices were relatively unchanged following the release.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.10% to an intraday high of 95.46. Although the dollar is on pace for one of its strongest weeks since the start of March, the index is still down more than 4% since early-December.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.