Oil prices climbed during Monday's Asian deals as renewed optimism surrounding a potential end to the U.S. government shutdown buoyed demand expectations in the world’s largest oil consumer, helping offset concerns about growing global supply.
By 3:55 pm AEDT (4:55 am GMT) Brent crude futures rose 45 cents, or 0.7% to US$64.08 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 48 cents or 0.8% to $60.23 per barrel.
Sentiment improved after the Senate voted 60–40 to end a Democratic filibuster on government funding legislation, marking a key step toward reopening the government.
Brent and WTI benchmarks fell 1.8% and 2% respectively last week, marking a second consecutive weekly decline amid growing worries over a potential supply glut.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to slightly increase output in December but paused further production hikes in the first quarter to prevent oversupply.
“Crude oil prices fell to USD63.3/bbl last week as investors weighed disruptions in Russian supply flows against a building surplus,” ANZ analysts said. “U.S. oil stockpiles rose by 5.2 million barrels recently, the biggest increase since July. Broader market sentiment remained sombre amid expectations of an oil glut.”
U.S. crude inventories have continued to build, while floating storage in Asian waters has doubled in recent weeks. Tighter Western sanctions have curbed Russian exports to China and India, and limited import quotas for independent Chinese refiners have also reduced regional demand.
In response, Indian refiners have increased purchases from the Middle East and the Americas to replace restricted Russian supply.
Meanwhile, Russian producer Lukoil faces intensifying operational challenges as a U.S. deadline approaches on 21 November for companies to cut ties with the firm.
A potential sale of its assets to Swiss trading group Gunvor collapsed last week, deepening uncertainty around Russian oil exports.
