Canadian officials on Sunday showed some optimism for the first time that they were beginning to get on top of the country's most destructive wildfire in recent memory, as favorable weather helped firefighters and winds took the flames southeast, away from oil sands boomtown Fort McMurray.

There was still no timeline, however, for getting Fort McMurray's 88,000 inhabitants back into what remains of their town, or when energy companies would be able to restart operations at evacuated sites near to the town, which has cut the area's oil output in half.

"It definitely is a positive point for us, for sure," said Alberta fire official Chad Morrison in a news briefing, when asked if the fight to contain the flames had a reached a turning point.

"We're obviously very happy that we've held the fire better than expected," said Morrison. "This is great firefighting weather, we can really get in here and get a handle on this fire, and really get a death grip on it."

The wildfire scorching through Canada's oil sands region in northeast Alberta since last Sunday night had been expected to double in size on Sunday, threatening the neighboring province of Saskatchewan.

But with the fire moving into its second week, light rains and cooler temperatures helped hold it back, giving officials hope that they can soon begin assessing the damage to Fort McMurray, close to where the fire started.

"As more and more fire has burned out around the city and the fuel around the city starts to disappear... we are starting to move into that second phase of securing the site and assessing the site," said Alberta Premier Rachel Notley, during the same media briefing.

Officials said it was too early to put a timeline on getting people back into the town safely.

COULD BURN FOR MONTHS

The broader wildfire, moving southeast through wooded areas away from the town, would still take a long time to "clean up," Morrison cautioned. Officials had previously warned that the fire could burn for months.

Alberta's government estimated on Sunday that the fire had consumed 161,000 hectares (395,000 acres). That was less than a previous estimate, but authorities warned the fire would likely grow overnight.

Fort McMurray is the center of Canada's oil sands region. About half of the crude output from the sands, or one million barrels per day, has been taken offline, according to a Reuters estimate.

The inferno looks set to become the costliest natural disaster in Canada's history. One analyst estimated insurance losses could exceed C$9 billion ($7 billion).

Officials said on Sunday the fire had done minor damage at CNOOC unit Nexen's Long Lake facility, in the site's yard. It was the first reported damage to an energy industry asset since the fire began.

Morrison said the blaze was southwest of a Suncor Energy Inc facility, which Suncor identified as its base oil sands mining site north of Fort McMurray, and also near an unidentified Syncrude facility.

Air tankers, helicopters and bulldozers had kept the fire from reaching those sites, according to Morrison. "We'll see how the day goes, but with the cooler weather, I do expect to hold the fire there," he said.

Suncor said on Sunday it will allow employees to return to work as soon as it is safe to do so. "We are hopeful that this will be soon," the company said in a statement.

The company added that it was making plans to use lodges and camps for temporary employee housing and arranging for workers to commute from Calgary and Edmonton.

Notley said she would meet with energy executives on Tuesday to talk about the impact of the fire and how the province can help them resume operations.

FORT MCMURRAY STILL OFF LIMITS

Even though the fire has largely pushed through Fort McMurray, the town is still too dangerous to enter.

Nearly all of Fort McMurray's residents escaped the fire safely, although two people were killed in a car crash during the evacuation. The town's 160 firefighters worked nearly non-stop in the first days of the fire, even as some of them lost their own homes, said fire captain Nick Waddington.

Thousands of evacuees are camped out in nearby towns but stand little chance of returning soon, even if their homes are intact. The city's gas has been turned off, its power grid is damaged, and the water is undrinkable.

Provincial officials said displaced people would be better off driving to cities such as Calgary, 655 km (410 miles) to the south, where health and social services were better.

"We are thinking about relocating in Edmonton for the time being. Maybe stay a year," said Kyle Mackay, 27, a mechanic for equipment trucking company Northern Diesel, who fled from Fort McMurray to Lac la Biche, about three hours' drive south, and is now staying with friends.

His girlfriend Sarah Smith, who left separately, is pregnant and due to be induced into labor in Lac La Biche on Monday morning. "It's really stressful, but I know we'll get through it," said Mackay.

The provincial government has promised evacuees pre-paid debit cards to cover immediate costs, with C$1,250 per adult and C$500 per dependent, expected to cost about C$100 million.

At present there are more than 500 firefighters battling the blaze in and around Fort McMurray, with 15 helicopters, 14 air tankers and 88 other pieces of equipment, Alberta officials said. – Reuters