WTI price jumps above $50 US for 1st time in 7 months before retreating

The price of a barrel of the North American oil benchmark briefly touched $50 US for the first time since October.

A barrel of West Texas Intermediate was changing hands at $50.03 early Thursday, up 47 cents since the previous day's close. Later in the day, oil gave up those gains and closed down eight cents at $49.48 US a barrel.

The last time oil closed above $50 a barrel was July 21 of last year, when it finished at $50.86 US a barrel.

A string of production outages in Nigeria, Venezuela and northern Alberta in recent weeks have knocked off as much as four million barrels a day worth of production offline, pushing up prices as the market has moved back closer into balance.

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"Outside of North America there's a lot of risk to supply as Venezuela looks to be teetering on the brink of collapse," energy consultant Carl Larry said in an interview. "Nigeria continues to struggle with rebels and attacks on pipeline."

All those disruptions have added up to good news for the price of oil.

"The pile on trade is happening as all the people who said an oil rally couldn't happen not so long ago have swung toward explaining why it has," Scotiabank economists Derek Holt and Dov Ziegler said in a note to clients Thursday.

But the psychologically important level of $50 could convince other producers who voluntarily shuttered production in recent months to start operations again now that prices have just about doubled from the $26 level they hit in February.

"Certainly ($50) is a psychological barrier. There is a momentum, people will try and push it up over that," said Ric Spooner, chief market analyst at Sydney's CMC Markets.

OPEC is scheduled to meet on June 2 to discuss a production cut, but with oil at $50, it's even more unlikely than usual that the disjointed cartel will agree to turn off the taps any more.

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Saudi Arabia produced a near-record-high 10.26 million barrels per day in April and has kept output relatively steady over the past year.

An unnamed senior OPEC delegate, asked by Reuters whether the group would make any changes to output policy at its June 2 meeting, said: "Nothing. The freeze is finished."

The loonie was at 77.11 cents US, up about a third of a cent from Wednesday's close. The TSX, meanwhile, popped about 100 points higher at open but it too, gave up all those gains later in the day to close down 5 points at 14,049.

A day earlier, the TSX closed above the 14,000-pt level for the first time this year.