SINGAPORE – Oil prices climbed on Monday as optimism grew that the U.S. government shutdown could soon end, boosting demand in the world’s top oil consumer and offsetting concerns about rising global supplies.
Brent crude futures increased 47 cents, or 0.74%, to $64.10 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 50 cents, or 0.84%, to $60.25 a barrel. The potential reopening comes after the Senate moved toward a vote to resume federal government operations, now in its 40th day of shutdown.
Analyst Tony Sycamore noted that restarting the government would restore pay for 800,000 federal workers and revive vital programs, bolstering consumer confidence and spending. “This should also help improve risk sentiment across markets and cause a rebound in WTI prices toward $62 a barrel,” he said.
Despite the gains, fears of oversupply persist. Brent and WTI fell about 2% last week as OPEC+ announced a slight output increase in December but paused further hikes for the first quarter. Rising U.S. crude inventories and doubling oil volumes on ships in Asia, combined with tightening Western sanctions on Russian oil, continue to weigh on markets.
Additional supply concerns stem from disruptions at Russian producer Lukoil and U.S. sanctions exemptions for Hungary, which have fueled worries over global oversupply even as Indian refiners pivot to the Middle East and Americas to replace sanctioned Russian oil.