Oil prices rose on Monday as optimism grew that the U.S. government shutdown could soon end, potentially boosting demand in the world’s largest oil consumer. This positive sentiment offset concerns about rising global supplies. Brent crude futures climbed 45 cents, or 0.71%, to $64.08 a barrel, while U.S. West Texas Intermediate rose 48 cents, or 0.80%, to $60.23 a barrel.
The price increase follows a roughly 2% decline last week, which marked the second consecutive weekly drop amid fears of a supply glut. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to a modest output increase in December but paused further hikes in the first quarter, citing concerns about excess supply.
The prospect of ending the shutdown, which has lasted a record‑breaking 40 days, also lifted equities on Monday. Reports indicated that lawmakers had reached a deal to fund operations through January, restoring funding for essential services such as food stamps and halting the firing of thousands of federal workers. President Donald Trump said, “It looks like we’re getting close to the shutdown ending,” fueling hopes for a resolution.
The shutdown has had significant economic implications. The Congressional Budget Office estimates it could shave 1.5 percentage points off quarterly GDP growth by mid‑November. Reopening the government would allow officials to resume releasing key economic data, including labor market reports that are crucial for the Federal Reserve’s consideration of interest‑rate cuts.
Asian markets responded positively to the news, with gains in Tokyo, Hong Kong, Shanghai, and Seoul, although Singapore and Wellington posted losses. The possibility of ending the shutdown has also boosted expectations of a rate cut, with markets pricing a 67% chance of a December reduction. While sentiment remains dented by concerns over overvalued stocks and doubts about artificial‑intelligence investments, the prospect of resolving the U.S. shutdown has provided a much‑needed boost to markets. Investors will continue to watch developments closely for their potential impact on the global economy.
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