Crude oil moves modestly higher in overnight trading early Monday following the events in Russia over the weekend, with traders reacting cautiously as they try to gauge the impact of the instability in the country.
Russia’s Wagner group of mercenaries made a short-lived rebellion on Saturday, seizing the southern city of Rostov and advancing toward Moscow while demanding the removal of Russian military commanders in charge of the war in Ukraine.
The army backed down and headed back to Ukraine, while their leader, Yevgeny Prigozhin, was exiled to Belarus, but the consequences for the war and to Vladimir Putin’s authority are still to be played out.
Brent crude futures (CO1:COM) +0.7% to $74.37/bbl and U.S. WTI crude (CL1:COM) also +0.7% to $69.67/bbl, after both benchmarks had jumped as much as 1.3% earlier in recouping a little of last week’s losses.
ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (DBO), (USL), (DRIP), (GUSH), (USOI), (NRGU)
U.S. crude oil futures have lost more than 13% so far this year, in part due to Russia’s resilient exports despite Western sanctions resulting from the Ukraine war.
While the latest geopolitical risk could add some short-term support to oil prices, continuing worries over China’s economic growth and recession risks in the U.S. and elsewhere seem likely to limit any increases.
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