Investing.com -- U.S. crude futures retreated from six-month highs on Friday, as a slight uptick in OPEC production in April reinforced long-term concerns related to the excessive supply glut on global energy markets.
On the New York Mercantile Exchange, WTI crude for June delivery traded in a broad range between $45.76 and $46.48 a barrel before settling at $46.16, down 0.54 and 1.16% on the session. It came one session after U.S. crude futures surged above $47 a barrel for the first time since early-November, as energy traders continued to react to sharp declines in domestic production and a surprising draw in crude inventories last week. WTI crude remains up by approximately 60% from its level three months ago when it touched 13-year lows at $26.05 a barrel.
On the Intercontinental Exchange (ICE), brent crude for July delivery wavered between $47.28 and $48.10, before closing at $47.74, down 0.34 or 0.71% on the day. North Sea brent futures approached 2016-yearly highs on Thursday after the influential Paris-based International Energy Agency (IEA) predicted a significant narrowing in the global supply-demand imbalance over the course of the year.
On Friday, though, OPEC said in it Monthly Oil Report for May that crude oil production last month rose by 188,000 barrels per day to average 32.44 million bpd, according to secondary sources. It came amid considerable increases in Iran, Iraq and Angola, partially offset by declines in Nigeria and Kuwait. Saudi Arabia, the largest producer in the 13-member cartel, saw its production fall slightly by 8,000 bpd to 10.125 million bpd. Output in the Saudi kingdom still remains near all-time record highs. Overall, OPEC production reached its highest level since the peak of the Financial Crisis.
Still, the value of OPEC's Reference Basket moved higher for the third consecutive month, gaining $3.21 per barrel to $37.86. OPEC credited an accelerated decline of US crude production, a weaker dollar, a wave of supply disruptions worldwide and forecasts for a sharp fall in non-OPEC production for the latest price gains.
"Record bullish bets on higher futures prices by speculators also helped once more this month," OPEC said in the report. "Nevertheless, fundamentally, oversupply still persists, and oil output remains high."
Elsewhere, oil services firm Baker Hughes said in its weekly rig count report that oil rigs last week fell by 10 to 318, dropping to the lowest level since October, 2009. Oil rigs throughout the U.S. have now fallen in eight consecutive weeks. The combined oil and gas rig count, meanwhile, decline by nine to 406, hitting a new 69-year low.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, jumped more than 0.65% to an intraday-high of 94.71. 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.