As markets reacted to the weekend’s events in Russia and the danger to President Vladimir Putin’s leadership that could disrupt supply over the next few months, global oil prices rose on Monday, bringing U.S. crude back to around $70 a barrel. This happened as US crude recovered to near $70 a barrel.
A brief uprising led by troops under the command of Yevgeny Prigojine, a close ally of Vladimir Putin, ended on Saturday evening. The Wagner Group leader negotiated a move to neighboring Belarus via President Alexander Lukashenko, and Russia agreed not to pursue any of the soldiers involved in the weekend convoy that was once heading for Mocsow.
However, despite the fact that Putin appears to have retained his grip on power, global markets are experiencing a huge increase in the level of uncertainty due to the potential outcomes of upcoming events such as the NATO conference in Vilnius and the fate of the national troops in Ukraine in the absence of Wagner’s help.
“While the immediate supply risks have subsided, the market will likely need to start pricing in a larger risk premium for oil given the growing instability in Russia,” said Warren Patterson, head of materials strategy. firsts at ING. “Although the immediate supply risks have disappeared, the market will likely need to start pricing in a higher risk premium for oil.” “How the aftermath of the failed insurgency is dealt with will really determine the amount of risk premium needed.”
Oil prices, which initially rose on concerns about supply limits as traders took advantage of last week’s 4% loss to add to long positions, have now reduced some of these gains amid weakening Chinese demand and the continued ramifications of central bank rate hikes. worldwide. Oil prices initially jumped on fears of supply restrictions as traders took advantage of last week’s 4% drop to add to their long positions.
On the other hand, the value of the Russian ruble fell 3% against the US dollar on Monday, which was the biggest one-day drop of the whole year. However, the ruble managed to recover to around 84.59 during late morning trading in Europe.
