(RTTNews) – Crude oil rose on Monday as prospects of a US government shutdown grew after senators pushed through a short-term funding bill, a development that eased tensions about the national economy and consumption.
WTI crude oil for December delivery was last seen trading up $0.31 (or 0.52%) at $60.06 a barrel.
The US government shutdown entered its 41st day today.
On Sunday night, US Senate negotiators reached a deal to advance a short-term funding bill with the support of eight Democrats. After a vote in the Senate today, the bill must receive the support of the House of Representatives, followed by the President’s signature to begin funding.
From a market perspective, sentiment remains bullish as there are now clear signs the impasse is ending, with about 750,000 unpaid federal workers receiving pay.
From an oil market perspective, if the US government reopens, domestic demand for goods and services, including energy, will increase, which will increase demand for crude oil.
Additionally, improved risk appetite may shift funds into commodities like oil.
On the geopolitical front, in the Middle East, the first phase of the Gaza peace plan proposed by President Donald Trump to end the Israel-Palestine war is now unfolding.
Today US Envoy Jared Kushner met with Israeli Prime Minister Benjamin Netanyahu in Jerusalem to ensure that the ceasefire remains strong and that the next phase of the ceasefire begins smoothly.
In Europe, as the Russia-Ukraine war enters day number 1,355, fierce fighting continues between the two armies and Russia is pushing hard to seize Pokrovsk, the industrial hub of Ukraine’s Donetsk region.
Recently, America and Britain had imposed sanctions on two Russian oil companies Rosneft and Lukoil. Trump also threatened to impose severe “penalty charges” on countries that buy Russian oil.
Russian sanctions take effect Nov. 21 but already China, India and Turkey, major Russian oil buyers, are looking to buy from the US, the Middle East and elsewhere.
Russian oil supplies have now been disrupted, forcing the country to offer steep discounts.
On November 2, the OPEC+ alliance announced its plan to raise the production target for December by 137,000 barrels per day. Notably, the group decided to put the hike on hold until the first quarter of 2026, citing “seasonality” as the reason behind its decision.
The International Energy Agency in its recent report estimated that the global oil surplus will reach almost 4 million barrels per day in 2026, the largest annual surplus on record. Despite potential supply disruptions, this excess could increase oil inventories and weigh on prices.
Markets are awaiting OPEC’s monthly oil market report for November 2025 which is expected on November 12.
Also on the same day, the International Energy Agency is set to launch the World Energy Outlook and Oil Market Report on November 13.
Based on recent US private economic data, investors are currently betting on a 64.1% chance of a rate cut at the US Federal Reserve’s upcoming December meeting.
Oil is a dollar-denominated commodity, the trajectory of oil prices may become clearer after the Fed meeting which will impact the dollar price.
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