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US oil closes 1.1 pct lower, but gains more than 3 pct for week

U.S. oil prices ended a three-day bull run on Friday, falling as a strong dollar made it more expensive to hold oil positions.

The dollar was at a more than two-week high against a basket of currencies, weighing on greenback-denominated commodities such as oil futures and making fuel imports more expensive for countries using other currencies and potentially hitting demand.

Also on Friday, Baker Hughes reported the number of oil rigs operating in the United States fell by 10 in the last week to a total of 310, marking the eighth straight week of declines. At this time last year, U.S. drillers had 660 rigs on line.

OPEC pumped 32.44 million barrels per day (bpd) in April, it said in a monthly report citing secondary sources, up 188,000 bpd from March. This is the highest since at least 2008, according to a Reuters review of past OPEC reports.

The group signaled the global oil glut may increase this year as surging output from its members makes up for losses from other countries whose production has been hit by low prices.

Prices were also pressured as investors locked in profits as oil headed for its fifth week of gains in the last six weeks and ahead of a long weekend in several countries in Europe, including Germany and France.

International Brent crude futures fell 30 cents to $47.78 per barrel. U.S. West Texas Intermediate (WTI) crude futures settled 49 cents lower, or 1.1 percent, at $46.21. That said, U.S. crude gained more than 3 percent for the week.

"The market sentiment remains biased to the upside supported by a growing view that the global oil complex is already in a rebalancing pattern," Dominick Chirichella, senior partner at the Energy Management Institute in New York.

The markets were boosted earlier after Exxon Mobil Corp declared force majeure on exports of Nigeria's largest crude grade as a portion of production had been curtailed following damage to a pipeline by a drilling rig.

Output from Africa's largest oil producer has fallen to 1.65 million barrels per day (bpd) due to militant attacks, Finance Minister Kemi Adeosun said, from 2.2 million bpd.

Petromatrix oil analyst Olivier Jakob said Nigerian production was unlikely to be much above 1 million bpd, excluding condensates.

"We expected more supply disruptions out of Nigeria this week but the pace of new supply problems from that country beats our expectations," he said.

Unplanned oil supply outages have risen this month to the highest in at least five years because of wildfires in Canada and further losses in Nigeria and Libya.

U.S. investment bank Jefferies estimated the wildfires may have temporarily shut in as much as 1.4 million bpd of production, and assuming there is no pipeline damage, it will take weeks to ramp production.

Top crude oil producer Russia poured cold water on the notion that recent falls in production in the Americas, Asia and Africa had wiped out a global production and storage overhang that helped pull down oil prices by over 70 percent between 2014 and early 2016.

Russian Energy Minister Alexander Novak told reporters on Thursday that the global oil surplus stood at 1.5 million bpd and that the market might not balance out until the first half of 2017.

"(The outlook that the market won't balance until the first half of 2017) is an optimistic forecast as oversupply persists and the decline in production volumes is slower than analysts expected," he said.

Novak said he expected Russia to produce 540 million tons (10.81 million bpd) or more of oil this year, up from 534 million tons in 2015.

— CNBC's Tom DiChristopher contributed to this story.