WTI rises as US funding bill fuels demand recovery optimism despite supply concerns

• Oil prices rise as US Congress moves toward passing a funding bill to end the government shutdown.
• Demand recovery prospects support the Oil market, but supply surpluses continue to cap gains.
• West Texas Intermediate trades around $60.75 a barrel, up 1.20% on Tuesday at the time of writing.

West Texas Intermediate (WTI) US Oil stabilizes around $60.75 on Tuesday at the time of writing, up 1.20% on the day, supported by hopes that the reopening of the US government will revive economic activity. The US Senate's approval of a temporary funding bill on Monday by a 60-40 vote raises expectations that the country's longest-ever budget impasse will soon end.

This prospect fuels optimism for a short-term rebound in energy consumption, as the resumption of federal agencies' operations is expected to boost government spending and transportation activity. However, the Oil market continues to face persistent oversupply signals as US inventories have risen for a fourth straight week, while Asian floating storage has doubled since October.

Since mid-September, global Crude benchmarks have fallen by about 15%, pressured by higher non-OPEC output and slower-than-expected Chinese refining demand, according to Oilprice. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) confirmed plans to increase production by 137,000 barrels per day in December before pausing hikes in the first quarter of 2026, a cautious step to rebalance the market.

The WTI price rebound is also supported by a weaker US Dollar (USD) following ADP data showing an average loss of 11,250 private-sector jobs over the four weeks ending October 25, released earlier in the day. The figures strengthened expectations of further monetary easing from the Federal Reserve (Fed), with markets now pricing in a 70% chance of a rate cut in December, according to the CME FedWatch tool.

Investors now turn their focus to the Organization of the Petroleum Exporting Countries (OPEC) Monthly Oil Market Report and the American Petroleum Institute (API) Weekly Crude Oil Stock data due on Wednesday, ahead of the US Energy Information Administration (EIA) Crude Oil Inventories awaited on Thursday. These reports are expected to provide fresh insight into the fragile balance between demand recovery and ongoing supply excess in the global Oil market.