On Monday, oil futures saw a slight increase after a brief mutiny by Russia’s Wagner Group. This incident had raised questions about President Vladimir Putin’s hold on power.
Price Action
- West Texas Intermediate crude for August delivery rose 0.4% to $69.44 a barrel on the New York Mercantile Exchange.
- August Brent crude, the global benchmark, rose 0.6% to $74.28 a barrel on ICE Futures Europe.
- July gasoline was up 0.4% at 2.529 a gallon, while July heating oil jumped 1.1% to $2.436 a gallon.
- July natural gas added 1% to $2.755 per million British thermal units.
Crude oil prices seem to have remained largely unaffected by the recent political turmoil in Russia. However, traders remain watchful as they evaluate its long-term impact on Putin’s presidency.
Market Drivers
A recent attempted mutiny led by Wagner Group chief Yevgeny Prigozhin on Friday saw the mercenary paramilitary force take over Russia’s southern military headquarters in Rostov-on-Don, with little resistance. The group then marched mostly unchallenged towards Moscow, until the advance halted just over 120 miles from the capital on Saturday. Without naming him directly, Putin accused Prigozhin of treason, which resulted in Prigozhin standing down and a deal reached that would see him sent to Belarus without charges of rebellion.
Commodity strategists at ING, Warren Patterson and Ewa Manthey, stated in a note on Monday, “While the immediate supply risks have disappeared, the market will likely have to start pricing in a larger risk premium for oil given the growing instability in Russia. How much of a risk premium will really depend on how the aftermath of the failed insurrection is dealt with.”
Read: What’s next for markets after aborted Wagner mutiny leaves Russia’s Putin weakened
