West Texas Intermediate (WTI) crude oil prices extend their recovery for a second straight session on Monday, trading around the key $60.00 per barrel mark during Asian hours. The renewed optimism follows reports that the record-breaking US government shutdown could soon end, boosting confidence in energy demand from the world’s largest oil consumer.

According to Bloomberg, a group of centrist Senate Democrats has agreed to support a deal aimed at reopening the government and funding critical departments and agencies for the next fiscal year. The proposed agreement would provide back pay to federal employees and allow delayed state-level transfers to resume. Some agencies would receive funding through January 30, while others would secure full-year allocations.

Despite the improving sentiment, oil prices remain vulnerable to supply-side concerns. OPEC+ and its allies, including Russia, have expanded production, sparking fears of a potential supply glut in early 2025. Although the group decided to slightly raise output in December, it signaled caution for the first quarter by pausing additional hikes.

Meanwhile, traders are closely monitoring the impact of fresh US sanctions on Russia’s leading oil companies, Rosneft and Lukoil. The sanctions, aimed at intensifying pressure on Moscow amid the ongoing Ukraine conflict, could reshape trade flows as major importers such as China and India diversify their energy sources to mitigate potential disruptions.

Overall, the near-term outlook for WTI remains cautiously optimistic. A successful resolution to the US government shutdown could improve demand sentiment, but persistent oversupply and geopolitical risks continue to limit the scope for a sustained rally above the $60.00 psychological threshold.