Oil Prices Rise as U.S. Government Shutdown Nears Resolution
Oil prices experienced an uptick on Monday, buoyed by positive sentiment surrounding the anticipated conclusion of the U.S. government shutdown. This development is expected to stimulate demand in the world's largest consumer market and ease prior worries about oversupply.
In light of this optimism, Brent crude futures rose by 0.71% to $64.08 per barrel, while West Texas Intermediate (WTI) crude futures increased by 0.8% to $60.23 per barrel.
This rise aligns with the U.S. Senate's decision on Sunday to vote on measures to reopen the federal government, potentially ending a historic shutdown that has lasted for forty days.
Market analyst Tony Sycamore from the International Crisis Group remarked to Reuters: "The forthcoming reopening is a positive development, as it will restore wages for 800,000 federal employees and reactivate essential programs, which will likely enhance consumer confidence and spending."
Sycamore further noted, "This should also bolster market sentiment and could push WTI prices closer to $62 per barrel."
It is important to mention that oil prices, represented by Brent and WTI, fell approximately 2% last week, marking a second consecutive weekly decline amid concerns about a global supply surplus.
Supply-side pressures continue to affect prices, as data reveals that the volume of crude oil stored on vessels in Asian waters has doubled recently. This increase is attributed to stricter Western sanctions that have curtailed imports from China and India. Additionally, a lack of import quotas has diminished demand from independent Chinese refiners, raising fears of a supply glut.
Notably, the "OPEC+" alliance had previously agreed to a slight production increase last December, while pausing any further increases in the first quarter of this year in an effort to stabilize the market.
