Oil prices edged lower in early Asian trading on Wednesday, as optimism about an imminent U.S. government reopening was tempered by lingering worries over global oversupply and a stronger dollar. Traders remained cautious, with the market struggling to find direction amid conflicting signals from supply and demand trends.
As of 20:21 ET (01:21 GMT), Brent crude futures for January delivery slipped 0.2% to $65.04 a barrel, while West Texas Intermediate (WTI) futures fell 0.2% to $60.85 a barrel.
Lawmakers Move to End Record U.S. Government Shutdown
The U.S. Senate passed a bill on Tuesday to reopen the federal government, and the Republican-led House of Representatives is expected to vote on the measure later on Wednesday. Once signed into law by President Donald Trump, the bill would officially end the 42-day shutdown — the longest in American history.
The prospect of the government returning to full operations lent limited support to crude prices, as the shutdown had disrupted multiple sectors, including air travel. Staffing shortages among air traffic controllers and security personnel caused widespread flight cancellations, raising concerns about weaker fuel consumption across the country.
Oversupply Fears Limit Gains Despite Sanctions Impact
Oil’s modest rebound earlier in the week was partly supported by news that Lukoil declared force majeure at one of its Iraqi oilfields, reflecting the fallout from newly enforced U.S. sanctions targeting Russia’s top energy firms. Analysts believe the sanctions could temporarily restrict supply, but this effect may be outweighed by broader signs of market oversupply.
Despite brief recoveries, crude benchmarks have been under pressure for much of 2025, with traders increasingly focused on the potential for a supply glut extending into 2026. The OPEC+ alliance’s gradual production increases, combined with sluggish demand in key markets such as China, have fueled expectations of excess supply persisting through the coming quarters.
While geopolitical risks and sanctions could create short-term volatility, analysts caution that weak consumption and rising output continue to define the broader narrative — keeping oil prices vulnerable to further downside in the months ahead.