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NEW YORK: Oil prices climbed about 3% to a two-month high on Thursday on signs of tight supply ahead of US summer driving season, as the European Union (EU) wrangled with Hungary over plans to ban crude imports from Russia over its invasion of Ukraine.

Brent futures rose $3.52, or 3.1%, to $117.55 a barrel by 1:34 p.m. EDT. US West Texas Intermediate (WTI) crude rose $3.97, or 3.6%, to $114.30.

Brent was on track for its sixth straight daily gain and highest close since March 25. WTI was headed for its highest close since March 23.

“Crude prices rose as a tight oil market was going to remain in place given the start of the summer driving season was going to keep a downward trajectory for US stockpiles,” said Edward Moya, senior market analyst at data and analytics firm OANDA.

Crude drew support from a big weekly drawdown in US crude inventories, reported on Wednesday.

“The fundamental backdrop ... is getting price supportive ... and will turn even more bullish once the EU sanctions on Russian oil sales are endorsed by all parties involved,” PVM Oil’s Tamas Varga said.

European Council President Charles Michel said he was confident an agreement can be reached before the council’s next meeting on May 30.

Hungary remains a stumbling block, as EU sanctions require unanimous support. Hungary is pressing for about 750 million euros ($800 million) to upgrade its refineries and expand a pipeline from Croatia.

Even without a formal ban, much less Russian oil is available as buyers and trading houses have avoided suppliers from the country.

Russia’s oil production should decline to 480-500 million tonnes this year from 524 million tonnes in 2021, state-run news agency RIA reported, citing Deputy Prime Minister Alexander Novak.

OPEC+ meets on June 2 and is expected to stick to last year’s deal to raise July output targets by 432,000 barrels per day, six OPEC+ sources told Reuters, rebuffing Western calls for a faster increase to control prices.

Other factors also are supporting oil prices.

“Shanghai is preparing to reopen after a two-month lockdown, while the US peak driving season begins with the Memorial Day weekend,” said Sugandha Sachdeva, vice president of commodities research at Religare Broking. The United States celebrates Memorial Day on Monday.

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