Oil prices rose on Monday as hopes grew that the US government shutdown could end soon, boosting demand in the world’s largest oil-consuming country. The partial reopening of the federal government is expected to restore pay for 800,000 workers and restart programs, supporting consumer spending and confidence.
Brent crude futures increased by 45 cents, or 0.71%, reaching $64.08 per barrel, while US West Texas Intermediate (WTI) crude rose 48 cents, or 0.80%, to $60.23 per barrel. Analysts say the rebound in oil prices reflects improving market sentiment amid expectations of stronger economic activity.
The US government shutdown has lasted 40 days, affecting millions and delaying essential programs. With the Senate moving closer to a vote to reopen the federal government, traders are anticipating increased fuel demand, which could lift oil prices further in the coming weeks.
However, global supply concerns continue to weigh on the market. OPEC+ agreed to slightly increase oil output in December while pausing further hikes in the first quarter to avoid a supply glut. In addition, US crude inventories are rising, and the volume of oil stored on ships in Asia has doubled recently.
Disruptions in Russian oil exports are also affecting markets. Lukoil faces operational challenges due to US sanctions, while Indian refiners are sourcing oil from the Middle East and the Americas to replace Russian supply. Furthermore, US President Trump granted Hungary a one-year exemption from sanctions on Russian oil imports, adding to global oversupply concerns.
Despite these supply-side pressures, analysts note that the anticipated US government reopening and renewed economic activity are likely to support oil prices in the short term. Market watchers will continue to monitor developments in Washington and global oil production trends to gauge price movements.
In other related news also read Oil Companies Warn Of Imminent Nationwide Fuel Shortage
Oil prices remain sensitive to political and economic events, with global supply, demand, and geopolitical tensions continuing to shape market dynamics.
