Oil Prices Surge as US Shutdown Ends—But Experts Warn of Bearish Outlook

Crude oil prices extended gains for a second consecutive session. The crude oil prices rose by 0.98 per cent to USD 60.20 per barrel on Monday. Market participants viewed this development as a sign of easing policy uncertainty.

The upward momentum was supported by optimism that the resolution of the government shutdown would help restore confidence in the US economy.

US senators on Sunday reached a bipartisan deal to reopen the government after a record 40-day shutdown. The agreement, backed by at least eight Senate Democrats, would fund the government through January 30 and include a vote on extending Affordable Care Act subsidies in December.

The Senate is set to vote on the proposal between 8:30 and 9 pm ET (7:30 am IST Monday), paving the way for the government to resume normal operations.

However, despite the short-term recovery, experts cautioned that the broader oil market remains bearish.

Narendra Taneja, energy expert, told ANI, "The Oil price scenario will remain bearish until we see steady growth in demand. The expected end of the US government shutdown may help improve oil market sentiment, leading to a slight price increase. Still, unless there is some significant growth in demand -- or some major disruption in the supply because of geopolitical or natural reasons -- the market sentiments would stay bearish".

According to experts, centrist Senate Democrats have backed a deal to reopen the government and fund several departments through the next fiscal year, which the markets have interpreted as a sign of easing policy uncertainty.

Riya Singh, Research Analyst - Commodities and Currency at Emkay Global Financial Services, said that although oil prices have rebounded, market caution persists.

"Despite this rebound, the broader oil market remains cautious amid persistent supply-side pressures. OPEC+ and its allies have modestly raised production for December, though they signalled restraint in further increases during the first quarter of 2026 to prevent oversupply. Rising output from non-OPEC producers continues to weigh on market balance concerns," she added.

Overall, while the end of the US government shutdown has provided a short-term rally to oil prices, analysts believe that without sustained demand growth or supply disruptions, the crude oil market is likely to maintain a bearish outlook in the coming months.

- ANI