Oil prices climbed on Monday, buoyed by optimism that a resolution to the prolonged US government shutdown would support demand in the world’s largest fuel consumer.
Brent crude futures gained 0.8% to $64.15 per barrel at the time of writing, as West Texas Intermediate futures rose by the same margin to $60.21 a barrel.
Sentiment was also lifted by encouraging inflation data from China, the world’s biggest oil importer.
Reports late on Sunday suggested that several Democrats had reached a deal to back a Republican spending bill to fund the government through to 30 January 30, paving the way for an end to the record-long shutdown.
“The imminent reopening is a welcome boost, restoring pay to 800,000 federal workers and restarting vital programs that will lift consumer confidence, activity and spending,” IG market analyst Tony Sycamore said.
“This should also help improve risk sentiment across markets” and cause a rebound in WTI prices toward $62 a barrel, he said.
The shutdown has disrupted travel, particularly air transport, in several major cities, leading to concerns about a slowdown in US fuel consumption. Investors believe an end to the impasse could clear the path for stronger air travel during the winter holidays, typically a driver of oil demand.