Oil prices fall; U.S. government reopening offers little support

Investing.com -- Oil prices fell Wednesday, remaining under pressure from persistent concerns over a looming supply glut and limited only support from increasing signs that an end to the longest ever U.S. government shutdown was at hand. 

At 08:30 ET (13:30 GMT), Brent oil futures for January fell 1.3% to $64.29 a barrel and West Texas Intermediate crude futures dropped 1.4% to $60.19 a barrel. 

U.S. government reopening likely this week 

The U.S. Senate on Tuesday approved a bill to reopen the government, with the Republican-controlled House Of Representatives indicating it will vote to approve the measure this week. 

The bill, which will then need to be signed into law by President Donald Trump, stands to end the longest ever shutdown in U.S. history. 

The prospect of the U.S. government reopening offered some support to oil prices, especially as a suspension of several key federal services disrupted travel across the country. 

Disruptions at major U.S. airports, due to shortages in air traffic and safety staffing, saw thousands of flights being cancelled across the country. This in turn raised concerns over disruptions in fuel demand. 

Oil markets weigh oversupply fears, sanction risks 

Oil prices had found some strength on Tuesday after reports showed Russia’s Lukoil declaring force majeure at an Iraqi oilfield, reflecting the impact of new, strict U.S. sanctions on Moscow’s largest oil producers. 

The sanctions, which were imposed last month, stand to curb global fuel supplies, and could offset the impact of a looming supply glut in the coming months.

Despite Tuesday’s gains, oil prices were still trading squarely lower so far in 2025, amid increasing anxiety over a supply glut in 2026. This was driven chiefly by the Organization of Petroleum Exporting Countries and allies, the OPEC+, steadily increasing production so far in 2025. 

Sluggish demand, especially in top oil importer China, is also expected to contribute towards a potential supply overhang. 

Oil demand to grow until 2050 - IEA 

Elsewhere, the International Energy Agency forecast in its annual World Energy Outlook on Wednesday that oil and gas demand could continue to grow until 2050. 

The projection was a departure from the IEA’s previous expectation that global oil demand would peak this decade, as the international body moved away from a forecasting method based on climate pledges back to one that takes into account only existing policies. 

World oil supply is expected to match demand next year in a reflection of the wider OPEC+ group’s production increases, an OPEC report showed on Wednesday, marking a further shift from its earlier projections of a supply deficit in 2026.

OPEC+, which groups the Organization of the Petroleum Exporting Countries, Russia and other allies, has raised its output targets by around 2.9 million barrels per day - or around 2.7% of global supply - since April.

It plans to pause production hikes in the first quarter of 2026 amid widespread predictions of an oversupply.

Ambar Warrick contributed to this article