LONDON: Oil prices were steady on Monday as investors assessed a potential end to the US government shutdown and concerns around oversupply in the crude market.
Brent crude futures rose 11 cents, or 0.17 per cent, to US$63.74 a barrel by 1051 GMT. US West Texas Intermediate crude was at US$59.88 a barrel, up 13 cents, or 0.22 per cent.
The US Senate on Sunday moved forward on a measure aimed at reopening the federal government and ending a now 40-day shutdown that has sidelined federal workers, delayed food aid and snarled air travel.
US lawmakers’ first step in ending the shutdown helped the return of risk appetite to markets, PVM analyst Tamas Varga said.
Analysts were concerned about any impact from flight cancellations on US jet fuel demand. Airlines canceled more than 2,800 US flights and delayed more than 10,200 on Sunday in the worst day for disruptions since the start of a US government shutdown.
Brent and WTI fell about 2 per cent last week and notched their second weekly decline, on fears of a supply glut. The Organisation 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.
There’s a decoupling between the rising volume of crude oil stored at sea and the increasingly limited availability of Russian products sustaining fuel demand, 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 US 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.
© New Straits Times Press (M) Bhd
