(Investing) – LONDON -Oil prices edged higher on Monday as investors assessed moves aimed at ending the U.S. government shutdown while concerns around oversupply in the crude market persisted.
rose 43 cents, or around 0.7%, to $64.06 a barrel by 1409 GMT. was at $60.18 a barrel, also up about 43 cents or 0.7%.
The U.S. 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.
RISK APPETITE RETURNS
U.S. lawmakers’ first step in ending the shutdown helped the return of risk appetite to markets, said PVM analyst Tamas Varga.
Analysts were concerned about any impact from flight cancellations on U.S. jet fuel demand. Airlines canceled more than 2,800 U.S. flights and delayed more than 10,200 on Sunday in the worst day for disruptions since the start of the shutdown.
Brent and WTI fell about 2% last week and notched their second weekly decline, on fears of a supply glut. The Organization 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 ON THE RISE
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 into 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.
Meanwhile, Russian oil producer Lukoil has declared force majeure at Iraq’s giant West Qurna-2 oilfield, four sources with knowledge of the matter said on Monday, after Western sanctions on the Russian oil major hampered its operations.
Lukoil’s operations faced mounting disruptions as a U.S. 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.
