Oil Prices Rise on Hopes U.S. Shutdown Will End Soon
Oil prices climbed on Monday amid growing optimism that the U.S. government shutdown could end soon, potentially boosting energy demand in the world’s largest oil consumer. The positive sentiment helped offset renewed worries about rising global supply levels.
Brent crude futures gained 45 cents, or 0.71%, to reach $64.08 per barrel by 04:26 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude rose 48 cents, or 0.80%, to $60.23 per barrel.
The long-running U.S. shutdown, now in its 40th day, appears close to resolution after the Senate moved forward on a vote to reopen the federal government.
Market Optimism Returns as Shutdown Nears End
According to IG market analyst Tony Sycamore, the expected reopening “restores pay to 800,000 federal workers and restarts vital programs that will lift consumer confidence, activity, and spending.”
He added that this development “should also improve overall risk sentiment” across financial markets and could drive WTI prices toward $62 per barrel in the near term.
Both Brent and WTI had declined roughly 2% last week, marking their second consecutive weekly loss, largely due to fears of a global oil supply glut.
OPEC+ Balances Output Amid Oversupply Concerns
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, announced a slight increase in production for December. However, the group decided to pause further hikes in the first quarter of next year to avoid worsening the oversupply situation.
Meanwhile, U.S. crude inventories have continued to rise, and oil stored on ships in Asian waters has doubled in recent weeks. The increase follows Western sanctions that reduced exports to China and India, while limited import quotas curbed demand from independent Chinese refiners.
Global Trade Shifts and Russian Supply Issues
As Russian supply declines, Indian refiners are increasingly sourcing crude from the Middle East and the Americas.
Russian producer Lukoil is also facing growing disruptions as the U.S. deadline for foreign firms to end business ties with the company approaches on November 21. The situation worsened after a proposed sale to Swiss trader Gunvor fell through.
Adding further pressure, President Donald Trump granted Hungary a one-year exemption from U.S. sanctions on Russian oil imports, which analysts say could contribute to global oversupply risks.
Outlook
Market attention now centers on the outcome of the Senate vote and its potential impact on oil demand and investor confidence. If the U.S. government reopens soon, improving consumer spending and easing global uncertainty could help stabilize oil markets in the short term.
