Oil up on Canada wildfire, dollar; big weekly loss for Brent

Fri May 6, 2016 3:24pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices edged up on Friday, supported by an early dip in the dollar and a wildfire that has shrunk Canadian oil sands crude output by a third, but Brent still ended with its sharpest weekly drop in four months as investors cashed out of April's big rally.

Reports of a militant attack on a Chevron platform in Nigeria's oil-rich Niger Delta region and a drop in the number of U.S. oil drilling rigs also helped lift prices on the day.

The dollar, which has a huge impact on greenback-denominated commodities such as oil, was down most of the day before recovering in late trade. The dollar dipped after the U.S. government reported that the economy added the fewest number of jobs in seven months in April, raising doubts about whether the Federal Reserve will raise interest rates before the end of the year.

Brent crude futures settled up 36 cents, or 0.8 percent, at $45.37 a barrel.

West Texas Intermediate (WTI) futures finished up 53 cents, or about 0.8 percent too, at $44.66.

For the week, Brent slid 6 percent for its biggest weekly decline since January. WTI fell 3 percent. The drops came after profit-taking by investors early in the week on April's gain of 20 percent or more in the two crude benchmarks.

"The global surplus still exists and there is still a possibility that oil prices could retrace further," said Dominick Chirichella, senior partner at the Energy Management Institute.

"However, the market is trading more and more in sync with the forward-looking or perception view, with the current bearish fundamentals mostly priced into the market."   Continued...

Pumpjacks are seen in Lagunillas, Ciudad Ojeda, in the state of Zulia, Venezuela December 22, 2015. REUTERS/Isaac Urrutia