The prospect of a tight market due to rising gasoline consumption in the United States during the summer, as well as the possibility of an EU ban on Russian oil, pushed up oil prices on Friday, putting them on track for weekly gains.
At 0844 GMT, Brent crude was up 58 cents, or 0.5 percent, at $117.98, putting it on track for a 5% gain this week.
WTI crude rose 27 cents, or 0.2 percent, to $114.36 per barrel in the United States. The price of WTI is expected to rise by about 1% this week.
"Oil prices have risen to the highest level since end of March, benefiting from renewed declines in U.S. oil inventories," said UBS analyst Giovanni Staunovo, citing renewed declines in US oil inventories.
The US Energy Information Administration reported on Wednesday that gasoline stocks in the US fell by 482,000 barrels last week to 219.7 million barrels. In the United States, the start of the summer driving season usually means higher consumption.
"The U.S. driving season and strong travel demand should help (prices). With supply growth lagging demand growth, the oil market is likely to stay undersupplied. Hence, we remain positive in our outlook for crude prices, "Staunovo went on to say.
Both benchmark crude contracts were also supported as the European Commission sought unanimous support from all 27 EU member states for new sanctions against Russia, with Hungary remaining a stumbling block.
According to a top Hungarian aide, the country would need three and a half to four years to transition away from Russian crude and make significant economic adjustments. According to the aide, Hungary could not support the EU's proposed oil embargo unless all issues were resolved.
"The combination of actual loss of supply and the increasing refusal to accept supply from Russia will see these commodities (oil and gas) move considerably higher," said Clifford Bennett, chief economist at ACY Securities.
So far this year, prices have risen by approximately 50%.
At its June 2 meeting, OPEC+ is expected to stick to last year's oil production deal and raise output targets for July by 432,000 barrels per day, according to six OPEC+ sources. As a result, the OPEC+ members will defy Western demands for a faster increase in order to combat rising prices.
By fLEXI tEAM