Key Points
- WTI crude rose 0.84% to $60.25 a barrel, while Brent gained 0.74% to $64.10.
- Markets expect the end of the 40-day U.S. government shutdown, which will restore pay to 800,000 federal workers and revive demand sentiment.
Oil prices advanced on Monday as progress toward ending the prolonged U.S. government shutdown lifted expectations for a rebound in economic activity and fuel consumption.
West Texas Intermediate (WTI) climbed 50 cents to $60.25, while Brent crude rose 47 cents to $64.10.
The Senate is moving toward a vote to reopen the government, potentially ending the record 40-day closure that has disrupted federal operations and delayed key data releases.
Analysts suggest that restoring pay to nearly 800,000 furloughed federal workers will improve consumer confidence and economic spending, helping support near-term oil demand.
IG’s Tony Sycamore noted the reopening “should help improve risk sentiment” and could lift WTI toward $62 per barrel.
Supply Concerns Temper Gains
Despite Monday’s gains, oil remains under pressure from persistent supply concerns. Both benchmarks fell about 2% last week, marking their second consecutive weekly decline as fears of oversupply mounted.
The OPEC+ alliance agreed to raise output slightly in December, while pausing further hikes through the first quarter to avoid flooding the market.
Yet, crude inventories continue to rise in the United States, and floating storage in Asian waters has doubled in recent weeks as tighter Western sanctions curbed imports to China and India.
In addition, Indian refiners have shifted toward sourcing barrels from the Middle East and the Americas to replace sanctioned Russian supply.
Russian producer Lukoil faces growing export disruptions ahead of the 21 November U.S. deadline for companies to sever business ties, following the collapse of its sale to Swiss trader Gunvor.
Adding to the complex backdrop, U.S. President Donald Trump granted Hungary a one-year exemption from sanctions on Russian oil imports, deepening oversupply concerns.
Technical Analysis
Crude oil prices edged higher toward $60.21, extending their short-term rebound as buyers regained control after defending support near $58.80. The 15-minute chart shows price action forming a gradual uptrend, with moving averages (5, 10, 30) realigning in a bullish crossover and the MACD turning positive.
The intraday high around $60.44 now acts as the immediate resistance, while momentum suggests buyers may attempt another breakout if prices sustain above the $60.00 mark.
If oil holds above $60.00, a retest of $61.00–$61.50 looks plausible. However, failure to sustain current levels could invite fresh selling pressure, dragging prices back toward $59.50.
Overall, the short-term outlook leans mildly bullish, though the broader trend remains vulnerable to macroeconomic headlines and shifts in global demand sentiment.
Cautious Forecast
If the U.S. shutdown officially ends and risk sentiment improves, WTI may extend gains toward the $61.50–$62.00 range in the near term. A failure to pass the reopening bill or signs of renewed inventory builds could cap upside momentum and drive prices back toward $59.00–$59.50.
With OPEC+ output still on track to edge higher in December, traders will watch global storage data and global headlines closely for clues on the next direction.
