By Yasin Ebrahim
Investing.com -- Oil prices settled higher, snatching their fifth weekly gain as investors weigh up a further tightening in supplies just as demand is set for a major boost as the Memorial Day holiday weekend kicks off the start of the U.S. driving season when Americans take to the road for vacation.
On the New York Mercantile Exchange crude futures for July delivery gained $0.98 cents to settle at $115.07 a barrel, while on London's Intercontinental Exchange, Brent added $2.03 to settle at $119.43 a barrel.
The weekly win streak for oil prices was supported by bets that demand for oil will continue to remain elevated as record high gas prices are unlikely to keep deterring Americans from traveling as U.S. driving season gets underway.
“Americans are facing record-high pump prices, but this does not appear to be deterring them from traveling or driving at the moment,” Commerzbank said in a note.
The national average price for a gallon of regular gasoline on Friday was $4.60, up from $3.04 a year ago, according to AAA.
On the supply side, the decreasing number of Russian barrels on the market is keeping bets of energy supply shortages front and center even as the EU struggles to reach an agreement on sanctions on Russia’s oil.
Russian Deputy Prime Minister Alexander Novak said earlier this week that total oil output from Russia this year could decline by 5% to 8% from the previous year.
“Russian oil producers are finding it difficult to sell barrels on the continent, forcing them to push cargo into Asia,” according to ANZ Research.
Supply fears aren’t helped by the latest rig count data, which serves as a proxy for oil production, which fell for the first time in 10 weeks.
Data last week showed the number of oil rigs operating in the U.S. fell by 2 to 574.