West Texas Intermediate (WTI) crude extended its rally for a second day, trading near $60.00 a barrel in Asian markets on Monday. Prices were buoyed by growing optimism that the US government shutdown could soon be resolved, which would support demand in the world’s largest oil consumer.
Bloomberg reported that a bipartisan group of Senate Democrats has agreed to back a funding deal that would reopen the government and finance federal departments and agencies for the coming year. Under the proposal, furloughed workers would receive back pay, states would get delayed transfers, and some agencies would be funded only through January 30 while others receive full-year budgets.
At the same time, crude faces headwinds from rising production across OPEC+ members and allies such as Russia, as well as non-OPEC producers, stoking fears of an oversupplied market. OPEC+ has announced a modest output increase for December but will hold production steady in the first quarter to guard against a glut.
Traders are also monitoring the impact of new US sanctions on Russia’s major oil firms Rosneft and Lukoil. As Washington steps up pressure over the Ukraine conflict, key importers like China and India are increasingly diversifying their crude supplies to mitigate sanctions risk.
