The potential of a tight market owing to increased gasoline use in the United States throughout the summer and the threat of an E.U. embargo on Russian oil boosted 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; it is on course for a 5 percent gain this week. WTI crude in the United States increased 27 cents, or 0.2 percent, to $114.36 a barrel. WTI should gain roughly 1% every week. “Oil prices have surged to their highest level since March,” said UBS analyst Giovanni Staunovo, “benefiting from continuing decreases in U.S. oil stockpiles.”

What is Pushing Prices Up?

Last week, gasoline stockpiles in the United States declined by 482,000 barrels to 219.7 million barrels, according to the United States Energy Information Administration. On Wednesday, the Energy Information Administration released a report. Increased consumption is usually associated with the start of the summer driving season in the United States. “The U.S. driving season and high travel demand should assist (prices),” Staunovo noted. Both benchmark crude contracts also had support. The European Commission sought unanimous backing from all 27 E.U. member states for fresh sanctions against Russia, with Hungary proving to be a stumbling block.

According to a top Hungarian aide, the government would require three and a half to four years to transition away from Russian oil and make significant expenditures to restructure its economy. According to the aide, Hungary could not support the E.U.’s proposed oil embargo unless they resolved all concerns. “The combination of real supply loss and increased unwillingness to take supplies from Russia will see these commodities (oil and gas) go significantly higher,” said Clifford Bennett, chief economist at ACY Securities. So far this year, prices have risen by roughly 50%. According to six OPEC+ sources, at its June 2 meeting, OPEC+ should stick to last year’s oil production agreement and increase July output objectives by 432,000 barrels per day, according to six OPEC+ sources.

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