SINGAPORE, June 26 (Reuters) – Oil prices rose in early Asian trade on Monday after a failed mutiny by Russian mercenaries over the weekend raised concerns about political instability in Russia and the potential impact on supplies of oil from one of the world’s largest producers.
Brent crude futures were up 95 cents, or 1.3%, at $74.80 a barrel by 2300 GMT on Sunday. U.S. West Texas Intermediate (WTI) crude was at $70.04 a barrel, up 88 cents, or 1.3%.
A clash between Moscow and the Russian mercenary group Wagner was averted on Saturday after the heavily armed mercenaries withdrew from the southern Russian city of Rostov under a deal that halted their rapid advance towards the capital .
However, the challenge has raised questions about President Vladimir Putin’s grip on power and concerns about possible disruption of Russian oil supplies.
RBC Capital Markets analyst Helima Croft said there were concerns that Putin would declare martial law, preventing workers from showing up at major cargo ports and energy facilities, and that it could halt millions of barrels of oil exports
“We understand that the White House actively engaged yesterday to reach out to major domestic and foreign producers about contingency planning to keep the market well-supplied if the crisis affected Russian production,” he added in a statement. sunday
Goldman Sachs analysts said markets may be pricing in a moderately higher likelihood that domestic volatility in Russia will cause supply disruptions or have a sizable negative impact on oil supplies going forward.
However, the impact may be limited because point fundamentals have not changed and because any impact on financial risk sentiment or oil demand due to increased uncertainty may offset, Goldman Sachs analysts added in a note
Both Brent and WTI fell around 3.6% last week on concerns that further interest rate hikes by the US Federal Reserve could undermine oil demand at a time when the recovery China’s economy has also disappointed investors after several months of softer-than-expected consumption, production and output. real estate market data.
“China’s economic growth has been a nightmare for commodity markets, particularly in oil and industrial metals,” CMC Markets analyst Tina Teng said in a note.
Reporting by Florence Tan; Editing by Jamie Freed
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