Oil Prices Rise as U.S. Government Shutdown Nears Resolution

Global oil markets experienced a notable rise on Monday, driven by optimism regarding the potential conclusion of the U.S. government shutdown, which could boost demand in the largest consumer economy for commodities.

In this positive context, Brent crude futures climbed by 0.71% to $64.08 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) futures rose by 0.8% to $60.23 per barrel.

This increase coincided with the U.S. Senate's vote on Sunday to reopen the federal government, marking the end of a historic shutdown that lasted for 40 days.

Commenting on this development, Tony Sycamore, a market analyst at the International Crisis Group, told Reuters: "The imminent reopening is a welcome boost, as it will restore salaries for 800,000 federal employees and revive vital programs that will help bolster consumer confidence and spending."

Sycamore further noted, "This should also help improve investor sentiment in the markets and could push WTI prices towards $62 per barrel."

It is important to highlight that oil prices, represented by Brent and WTI, fell by approximately 2% last week, marking their second consecutive weekly decline, due to investor concerns about a global oversupply.

Supply-side pressures on prices persist, with data indicating that the volume of crude oil stored on ships in Asian waters has doubled in recent weeks. This increase is attributed to heightened Western sanctions that have reduced imports from China and India. Additionally, the lack of import quotas has led to decreased demand from independent Chinese refineries, fueling fears of a supply surplus.

Notably, the "OPEC+" alliance had previously agreed to a slight increase in production last December, while suspending any further increases during the first quarter of this year, aiming to restore balance in the market.