Oil prices fell on Wednesday but held onto most of the previous session's gains amid expectations that the end of the longest US government shutdown in history could boost demand in the world's largest oil consumer, UNN reports with reference to Reuters.
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Brent crude futures fell 22 cents, or 0.34%, to $64.94 a barrel by 06:25 GMT (08:25 Kyiv time) after rising 1.7% on Tuesday. US West Texas Intermediate crude futures fell 22 cents, or 0.36%, to $60.83 a barrel after rising 1.5% in the previous session.
The Republican-controlled US House of Representatives will vote on Wednesday afternoon on a bill, already approved by the Senate, that would restore funding for government agencies until January 30.
The resumption of US government operations will strengthen consumer confidence and economic activity, stimulating oil demand, IG market analyst Tony Sycamore wrote in a note.
The US government shutdown, which has disrupted tens of thousands of flights in just the past few days, could also lead to a rebound in passenger traffic and jet fuel consumption ahead of the holiday season.
The International Energy Agency, in its annual report, predicts that oil and gas demand could continue to grow until 2050.
This forecast differs from the IEA's previous expectation that global oil demand would peak this decade, as the international agency shifted from a forecasting method based on climate commitments to one that considers only current policies.
The current policy scenario, last used in 2019, projected demand growth of approximately 13% by mid-century compared to 2024 levels.
As for supply, the effects of US sanctions against Russia's two largest oil producers, Lukoil and Rosneft, further support prices, the publication writes.
Chinese refiner Yanchang Petroleum is seeking to buy non-Russian oil in its latest crude tender, and Sinopec subsidiary Luoyang Petrochemical has shut down for maintenance as an indirect result of the sanctions, Reuters reported on Tuesday.
These measures, taken last month, were the first direct sanctions against Russia imposed by US President Donald Trump since the beginning of his second term.