May 26, 2016 8:16 am
Updated: May 26, 2016 7:38 pm

Oil surges past $50 for first time in 7 months

WATCH ABOVE: Oil was hovering around $50 U.S. a barrel Thursday, and it made many people wonder if our slumping economy is finally on the rebound. Gary Bobrovitz reports.

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The price of oil broke through the $50 a barrel barrier Thursday morning for the first time in seven months.

U.S. crude traded as high as US$50.21 after the U.S. government reported a larger-than-expected drop in fuel stockpiles for last week.

READ MORE: Blame Canada, Nigeria: Oil prices hit 6-month highs

In Europe, Brent crude – which is used to price international oils — cracked the $50 mark as well.

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But prices settled back below that mark a couple of hours later. By noon ET, West Texas crude was trading at US$49.67.

Oil prices have been rising steadily in 2016 after hitting a 14-year low of around $26 a barrel in February.

READ MORE: Should Canadians be cheering for lower or higher oil prices?

The surge in prices today is helping to push up oil-based currencies, like the Canadian dollar. This morning, it was trading at 77.19 cents US, up four-tenths of a cent from Wednesday’s close. By noon, the dollar was trading at just under 77.1 cents US.

As well, global stock markets were mostly higher on Thursday in reaction to oil’s steady rise.

“This move does appear to have been coming for the last couple of weeks, the question now is whether it can establish itself in a new range between $50 and $55,” said Craig Erlam, senior market analyst at OANDA. “While supply disruptions are likely to continue to support prices for now, a further strengthening in the dollar over the next couple of months could act as something of a counterweight and keep prices in check.”

READ MORE: Canada’s economy to take a hit from Fort McMurray wildfires: economists

Earlier this month, oil hit fresh highs for the year due in part to unrest in Nigeria and the Fort McMurray wildfire. In Nigeria, attacks by militants in Niger Delta region cut the country’s daily output by 800,000 barrels.

In Alberta, oilsands production came to a near standstill as the Fort McMurray wildfire forced tens of thousands of people to flee the city and nearby oilsands camps.

— With files from the Associated Press

© 2016 Global News, a division of Corus Entertainment Inc.

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