U.S. Shutdown Weighs on Sentiment as Oil Prices Hold Near $60

Crude oil prices remain near $60 per barrel, reflecting a balance between bearish fundamentals and tentative optimism surrounding U.S. government shutdown negotiations. West Texas Intermediate (WTI) futures are holding near $60, while Brent is up 85 cents to $64 per barrel. Despite modest gains, global markets remain cautious amid sluggish demand growth, concerns about oversupply, and mounting disruptions to U.S. economic activity caused by the ongoing shutdown.

The U.S. Senate advanced a bill Sunday to reopen the federal government, signaling an end to the record 40-day shutdown that has sidelined hundreds of thousands of federal employees, delayed critical economic data, and snarled travel nationwide. Airlines canceled more than 2,800 flights and delayed over 10,000 on Sunday alone, marking the worst day for air travel since the shutdown began. The impact on jet fuel consumption is already measurable, as flight schedules tighten and overall travel activity declines. According to J.P. Morgan analysts, U.S. oil consumption has softened over recent weeks, with daily flight activity dropping 7% week over week.

Beyond aviation, broader signs of weakening demand are evident across multiple sectors. J.P. Morgan's latest analysis estimates that global oil demand growth is tracking just 0.85 Mbpd so far this year, slightly below expectations. High-frequency indicators suggest that U.S. container arrivals fell 8% year-over-year in November, marking the third consecutive monthly decline, while industrial demand in Europe and petrochemical consumption in Asia remain muted. These trends, coupled with rising inventories, have reinforced a bearish outlook for crude and refined product markets heading into winter.

Meanwhile, global supply continues to expand. OPEC+ recently confirmed a 137,000 bpd increase in December output targets but plans to pause further hikes in early 2026. Since April, the group has collectively added roughly 2 Mbpd of production, while oil stored offshore in Asia has doubled in recent weeks on tightening sanctions on Russian exports. The result has capped any bullish pressure in crude prices, keeping WTI near the $60 mark.