By Barani Krishnan

Investing.com — Crude prices were mixed on the week as trading neared Friday’s close, with global benchmark Brent showing a weekly loss amid a continued holdout by Europe on a Russian oil ban, while U.S. crude was almost flat on strong summer demand bets and supply tightness that have pushed pump prices to record highs.

Both Brent and U.S. crude’s West Texas Intermediate benchmark were up more than 3% in Friday’s intraday trade, extending their recovery from a near 10% loss in the first two days of the week sparked by fears that America might be tipped into recession from aggressive rate hikes by the trying to beat the worst inflation in 40 years.

London-traded closed at 11:30 GMT (17:30 GMT), one hour after the close. It was $111.19. That’s a 3.5% increase of $3.74. The week was down 1.7%.

New York-traded stocks were at $110.08; up 3.7%, or $3.95. The week was however down 0.5%.

The divergence between Brent and WTI is “a story of two oils,” said John Kilduff, partner at New York energy hedge fund Again Capital. “The hold out of an European embargo, particularly by Hungary is limiting Brent’s upside, while WTI is basking in bullish glory from the refining crunch in fuels that’s sent pump prices to record highs.”

Friday’s comments by some European Union countries suggested that Russia oil ban should be postponed to allow for other sanctions to Moscow. This is especially true if there was no immediate agreement from Budapest to impose an embargo.

Saudi Arabia’s Energy Minister Abdulaziz bin Salman, meanwhile, tried to avert any blame on OPEC+ for the record high pump prices in the United States, saying it was a lack of U.S. refining capacity that was responsible for the crisis rather than supply from the global oil exporters alliance.

“The bottleneck is now to do with refining,” Abdulaziz told Bloomberg in an interview. “I did warn this was coming back in October. In the past several years many of the world’s refineries, especially those in Europe or the USA, have been shut down. The world is running out of energy capacity at all levels.”

Fuel prices have reached record highs, with gasoline selling at over $4.50 per gallon in some US stations and diesel at more than $6.

International Energy Agency (IEA) warned Thursday that high pump prices, slowing growth and a weak recovery in demand are likely to severely limit the recovery of demand through the remaining year and well into 2023. 

According to economists, the US could fall back on its path of resilience following the devastating coronavirus pandemic that lasted two years. This is despite record fuel prices and Fed rate increases.