OIL PRICE: BRENT ABOVE $118, WTI ABOVE $114
REUTERS - May 27 - Oil prices rose on Friday and were on track for weekly gains, supported by a prospect of a tight market due to rising gasoline consumption in the United States in summer, and also the possibility of an EU ban on Russian oil.
Brent crude was up 58 cents, or 0.5%, at $117.98 at 0844 GMT, and was on track for a gain of about 5% this week.
U.S. West Texas Intermediate (WTI) crude rose 27 cents, or 0.2%, at $114.36 a barrel. WTI is set for a weekly gain of about 1%.
"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.
U.S. gasoline stocks (USOILG=ECI) fell by 482,000 barrels last week to 219.7 million barrels, U.S. Energy Information Administration said on Wednesday. The start of summer driving season in the United States normally entails increased 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 added.
Both benchmark crude contracts were also supported as the European Commission continued to seek unanimous support of all 27 EU member states for its proposed new sanctions against Russia, with Hungary posing a stumbling block.
A top Hungarian aide said the country needed 3-1/2 to 4 years to shift away from Russian crude and make huge investments to adjust its economy. Hungary could not back the EU's proposed oil embargo until there was a deal on all issues, the aide said.
"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.
Prices have gained about 50% so far this year.
OPEC+ is set to stick to last year's oil production deal at its June 2 meeting and raise July output targets by 432,000 barrels per day, six OPEC+ sources told Reuters. The OPEC+ members would thereby rebuff Western calls for a faster increase to lower surging prices.