Oil prices rose on Monday, buoyed by optimism that the United States government shutdown may soon end, a development that could strengthen fuel demand in the world’s top oil consumer. The upbeat sentiment helped offset ongoing concerns about rising crude supplies in global markets.
By 07:51 GMT, Brent crude futures gained 39 cents, or 0.61%, to $64.02 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed 43 cents, or 0.72%, to $60.18 a barrel.
The 40-day U.S. government shutdown appeared to be approaching its conclusion after the Senate moved forward on Sunday with a vote to reopen federal operations, sparking relief across financial markets worldwide.
“The imminent reopening is a welcome boost, restoring pay to 800,000 federal workers and restarting vital programs that will lift consumer confidence, activity and spending,” said Tony Sycamore, market analyst at IG.
“This should also help improve risk sentiment across markets and cause a rebound in WTI prices toward $62 a barrel,” he added.
While traders welcomed signs of progress in Washington, analysts warned that widespread flight cancellations could temporarily weigh on jet fuel demand. On Sunday, airlines canceled over 2,800 flights and delayed more than 10,200, marking the worst day for air travel disruptions since the shutdown began.
Both Brent and WTI dropped around 2% last week, logging their second consecutive weekly loss, as concerns over excess supply persisted. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) recently agreed to slightly raise production in December, though the group signaled it would pause additional hikes in the first quarter to avoid flooding the market.
In the U.S., crude inventories continue to climb, while the volume of oil stored offshore in Asian waters has doubled in recent weeks. The increase follows stricter Western sanctions that have curbed oil flows to China and India, coupled with import quota shortages that have constrained independent Chinese refiners.
Indian refiners have increasingly turned to suppliers in the Middle East and the Americas to replace restricted Russian cargoes.
Meanwhile, Russia’s Lukoil faces growing operational challenges as the November 21 deadline approaches for companies to cut business ties with the firm. A proposed sale of its assets to Swiss trader Gunvor has collapsed, further complicating the situation.
Adding to the supply-side uncertainty, U.S. President Donald Trump’s decision to grant Hungary a one-year exemption from sanctions on Russian oil imports has sparked additional concern about a potential global oversupply, according to Sycamore.