Oil Fluctuates After Russia Mutiny Rattles Key OPEC+ Producer

(Bloomberg) -- Oil fluctuated as investors weighed the potential for more civil unrest in Russia after the dramatic but short-lived rebellion in the major OPEC+ producer over the weekend.

West Texas Intermediate traded near $69 a barrel and Brent was steady after both benchmarks pared earlier gains of more than 1%. An eerie calm fell on Moscow after the end of the uprising led by Yevgeny Prigozhin, head of the Wagner mercenary group, while financial markets were relatively calm.

“Crude has so far exhibited the typical default reaction to unrest or uncertainty in a major producing country,” said Vandana Hari, the Singapore-based founder of Vanda Insights. “There should be no impact on Russia’s oil and gas supply.”

Russia is a key producer the OPEC+ coalition, along with Saudi Arabia, and any prolonged turmoil in the nation could reverberate through global oil markets. The country’s war in Ukraine has already upended trade flows, with major consumers in Asia including China boosting imports of Russian energy.

Goldman Sachs Group Inc. said the impact on oil prices following the armed uprising in Russia could be limited because markets are often focused on spot fundamentals, which have not changed. However, RBC Capital Markets LLC said the risk of further civil unrest “must be factored into our oil analysis.”

Oil in New York is still around 13% lower this year, in part due to Russia’s resilient exports, along with aggressive monetary tightening from the US Federal Reserve and a lackluster economic recovery from China. Recession alarms are also ringing around Europe’s bond market.

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