Oil prices rise amid optimism over US government shutdown resolution
Oil prices climbed on Monday, buoyed by optimism that a potential resolution to the U.S. government shutdown could soon boost demand in the world's largest oil consumer.
Brent crude futures rose by 52 cents, or 0.82%, to $64.15 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by 56 cents, or 0.94%, reaching $60.31 per barrel, News.Az reports, citing Reuters.
The U.S. Senate took a significant step forward on Sunday in efforts to end the 40-day government shutdown, which has disrupted federal services, delayed food aid, and caused air travel disruptions.
According to PVM analyst Tamas Varga, the Senate's progress reignited market risk appetite, contributing to the uptick in oil prices.
Analysts were concerned about any impact from flight cancellations on U.S. jet fuel demand. Airlines canceled more than 2,800 U.S. flights and delayed more than 10,200 on Sunday in the worst day for disruptions since the start of a U.S. government shutdown.
Brent and WTI fell about 2% last week and notched their second weekly decline, on fears of a supply glut. The Organization of the Petroleum Exporting Countries and its allies, or OPEC+, agreed to increase output slightly in December, but it also paused further hikes in the first quarter.
Crude inventories are also on the rise in the United States while the volume of oil stored on board ships in Asian waters has doubled in recent weeks after tightening Western sanctions curtailed imports to China and India and as a shortage of import quotas curbed demand from independent Chinese refiners.
There's a decoupling between the rising volume of crude oil stored at sea and the increasingly limited availability of Russian products, PVM's Varga said.
Russia's Tuapse oil refinery in the Black Sea suspended fuel exports after drone attacks earlier this month, according to two industry sources and LSEG ship tracking data.
Russian oil producer Lukoil is facing mounting disruptions as a U.S. deadline for companies to cut off business with the Russian company looms on November 21 and after a hoped-for sale of the operations to Swiss trader Gunvor collapsed.
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