Oil Prices Ease as Markets Await U.S. Government Reopening
Oil prices edged lower on Wednesday but held most of their recent gains, as traders bet that a potential end to the prolonged U.S. government shutdown could boost fuel demand in the world’s largest oil consumer.
Brent crude futures slipped 22 cents, or 0.34%, to $64.94 a barrel by 06:25 GMT, after gaining 1.7% in the previous session. U.S. West Texas Intermediate (WTI) crude fell 22 cents, or 0.36%, to $60.83 a barrel, following a 1.5% rise on Tuesday.
The U.S. House of Representatives, controlled by Republicans, is expected to vote Wednesday afternoon on a Senate-approved bill to restore government funding through January 30. Analysts say a government reopening could lift consumer confidence and economic activity, further supporting oil demand.
According to Tony Sycamore, market analyst at IG, a reopening could also trigger a rebound in travel and jet fuel consumption, especially ahead of the holiday season.
IEA Sees Longer-Term Growth in Oil Demand
The International Energy Agency (IEA), in its latest World Energy Outlook, forecast that global oil and gas demand will likely continue rising until 2050. The updated forecast marks a shift from its earlier view that oil demand would peak within this decade.
The IEA’s revised projection is now based on existing policies, rather than future climate pledges, and estimates that global demand could rise about 13% by mid-century compared to 2024 levels.
Meanwhile, both the Organization of the Petroleum Exporting Countries (OPEC) and the U.S. Energy Information Administration (EIA) are set to release their monthly oil outlooks later on Wednesday.
Sanctions on Russian Oil Firms Support Prices
On the supply side, U.S. sanctions on Russia’s two largest oil producers, Lukoil and Rosneft, have started to disrupt trade flows, offering some support to prices.
According to Reuters, Chinese refiner Yanchang Petroleum is now seeking non-Russian oil in new tenders, while Sinopec subsidiary Luoyang Petrochemical has temporarily halted operations for maintenance — an indirect consequence of the sanctions.
These measures mark the first direct sanctions on Russia’s energy sector by U.S. President Donald Trump since the start of his second term, signaling a firmer stance on energy trade restrictions.
