Crude prices similar to FridayClash between Moscow and the mercenary group avoided over the weekend. Focus shifts to tightening global supplies, US holiday demand. the team count falls for the eighth consecutive week
BENGALURU, June 26 (Reuters) – Oil prices were largely unchanged in choppy trading on Monday as investors balanced concerns about growing global demand against political instability in Russia that could exacerbate disruptions in global supply.
Brent crude futures were up 3 cents at $73.88 a barrel at 10:55 a.m. EDT (1455 GMT), while U.S. West Texas Intermediate (WTI) futures were down 8 cents at 69.08 dollars a barrel
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 some concern over the possible disruption of Russian oil supplies.
“There’s not a lot of geopolitical impact on the market right now. It’s dominated by economics, not geopolitics,” Daniel Yergin, vice president of S&P Global, said on the sidelines of an industry event on Monday.
Price Futures Group analyst Phil Flynn warned that Russian political instability could worsen supply shortages in the coming months due to Saudi Arabia’s pledge to cut output from July, a risk of reduced US production and the imminent end of US strategic reserves.
“The reality is (the Russian turmoil) is another risk against complacency in a market that has been counting on a future drop in demand to meet what will be a big drop in supply,” Flynn said.
In an early indicator of future US supply, the number of oil and natural gas rigs operated by US energy companies fell for an eighth straight week for the first time since July 2020, a closely watched report showed on Friday.
“(Beyond Russia) the focus is on Saudi Arabia as the kingdom implements its additional output cut for July, which we should see in lower exports as well as the coming weekend of Independence Day and its impact on demand,” Smith said.
Both Brent and WTI prices fell 3.6% last week on concerns that further interest rate hikes by the US Federal Reserve could hurt oil demand at a time when China’s economic recovery has also disappointed investors.
Reporting by Shariq Khan Additional reporting by Noah Browning, Florence Tan, Sudarshan Varadhan and Mei Mei Chu Editing by Emelia Sithole-Matarise and Mark Potter
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Shariq Khan
