By Yasin Ebrahim

Investing.com — The oil prices rose higher this week as investors weigh in on a tightening of supplies. However, demand will see a significant boost due to Memorial Day weekend which marks the beginning of U.S. driving seasons when Americans travel for their vacation.

The July delivery on the New York Mercantile Exchange gained $0.98 to settle at $115.07 a bar, while London’s Intercontinental Exchange added $2.03, settling at $119.43 a bar.

Oil prices won their weekly wins due to bets that oil demand will remain high as record-high gas prices don’t deter Americans from driving as the U.S. driving seasons begins.

“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.

AAA reported that Friday’s average national price of a gallon regular gasoline was $4.60. That is an increase from the $3.04 it cost a year ago.

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.

Alexander Novak, Russian Deputy Prime Minister, stated earlier in the week that Russia’s total oil production could fall by between 5% and 8% this 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.

The data from last week indicated that operating costs in the U.S. dropped by 2 to 574.