Oil Prices Surge as US Government Shutdown Ends, but Bearish Market Outlook Persists

Oil prices rose by nearly 1% on Monday following the end of the US government shutdown. Despite the gain, experts warn the crude market remains bearish without significant demand growth or supply disruptions. The temporary relief is seen as a sign of easing policy uncertainty.

In a market response to the resolution of the US government shutdown, oil prices surged on Monday, with crude oil advancing by 0.98%, reaching $60.20 per barrel. This gain marked a second consecutive session of increases, as market participants found solace in the easing of policy uncertainty.

Optimism about the US economy grew following a bipartisan Senate agreement reached on Sunday, ending a historic 40-day shutdown. The deal, supported by at least eight Senate Democrats, ensures government funding until January 30 and proposes a vote on health care subsidies by December, which restored some confidence.

Despite this development, experts are cautious. Narendra Taneja, an energy expert, expressed skepticism about sustained price motivation without steady demand increases or significant supply disruptions. With OPEC+ signaling restrained production increases and non-OPEC producers elevating output, analysts remain wary of a bearish market trend in the months ahead.

(With inputs from agencies.)