Oil prices edged higher on Monday as signs of progress toward ending the prolonged US government shutdown lifted investor confidence. The positive sentiment outweighed lingering concerns about rising global supplies.
Brent crude increased by 47 cents to trade around $64.10 a barrel, while US benchmark WTI rose by 50 cents to about $60.25. The rebound comes after last week’s nearly 2 percent decline, driven by fears of a global oil surplus.
Market analysts said optimism surrounding a potential US government reopening has improved the outlook for demand. After 40 days of gridlock, the US Senate appears closer to striking a deal that could restore normal economic activity.
Tony Sycamore, a market analyst at IG, said that reopening the government would “restore pay to hundreds of thousands of federal workers and revive key programs that support consumer confidence and demand.” He added that renewed optimism could push WTI oil prices toward $62 a barrel in the near term.
However, supply-related concerns remain. OPEC+ recently approved a small increase in production for December but decided against further hikes early next year to prevent oversupply. Meanwhile, US crude inventories have continued to grow, and oil storage on ships in Asian waters has nearly doubled.
This increase follows sanctions that restricted Russian crude exports to China and India, as well as reduced import quotas for some Chinese refiners. India has been turning to the Middle East and the Americas to fill the supply gap.
Adding to the uncertainty, Russian producer Lukoil faces disruptions before a November 21 deadline for US firms to end partnerships, after a failed attempt to sell assets to Swiss trader Gunvor.
Despite these challenges, analysts say sentiment has improved slightly. Hopes of stronger US demand and renewed economic stability are helping support oil prices as the market looks for balance between supply and consumption.
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