By Peter Nurse
Investing.com -- Oil prices eased slightly Friday but remained on course for another weekly gain, supported by rising U.S. demand at the start of the summer driving season adding to a tight global market.
By 9:15 AM ET (1315 GMT), U.S. crude futures traded 0.4% lower at $113.64 a barrel, while the Brent contract fell 0.2% to $113.94 a barrel.
U.S. Gasoline RBOB Futures were up 0.1% at $3.8800 a gallon.
Any gains this week would mean the crude market registered its fifth consecutive positive week, the best run since February, with futures more than 50% higher this year.
The U.S. starts a three-day weekend on Saturday, with Monday’s Memorial Day usually regarded as the start of summer driving season, and pent-up demand for travel in the reopened U.S. economy is expected to trump record-high gasoline prices.
Data released Wednesday from the U.S. Energy Information Administration showed a larger than expected draw in the crude oil inventories last week, which implies greater demand and is normally considered a bullish factor for crude oil prices.
The tight nature of the market, particularly in the U.S., has prompted the Biden Administration to rethink its energy policy, with Bloomberg reporting that it is asking the oil industry about the possibility of reopening shuttered refineries to increase domestic supplies.
The administration in office started with a much greener vision but worries are obviously starting to mount that high oil prices could have a decisive impact on the midterm elections in November.
Baker Hughes will detail the number of crude oil rigs working in the U.S. later in the session, as usual.
Taking a wider view, the market is still looking for the European Union to agree to an embargo on Russian oil in retaliation for Moscow’s invasion of Ukraine.
Hungary has opposed the plan, given its dependence on Russia for its energy supplies, but European Council President Charles Michel said earlier this week that he is confident that an agreement can be reached before the body's next meeting at the end of May 30.
“We believe that a sharp contraction in Russian oil exports could trigger a full-blown 1980s style oil crisis and push Brent well past $150 per barrel," analysts at Bank of America said in a note.
That said, Bloomberg reported that unprecedented amounts of Russian oil were heading to India and China, with Kpler stating that between 74 million and 79 million barrels were in transit and floating storage over the past week, more than double the 27 million barrels just before the February invasion of Ukraine.
The next source of interest in the market will be next week’s meeting of the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+.
The cartel is widely expected to raise July output targets by 432,000 barrels per day, keeping to its previously stated plan, and rebuffing Western calls for a faster increase to try and curb high prices.