June 26, 2023 (MLN): Oil prices fell on Monday after showing upward signals earlier in the trading session amid supply concerns arising from political uncertainty in Russia, one of the world's largest oil producer.
Brent crude is currently trading at $74.09 per barrel, down by 0.30% on the day.
While West Texas Intermediate crude (WTI) is trading at $69.28 per barrel, down by 0.33% on the day.
Both benchmarks, Brent Crude and WTI experienced a decline of 0.30% and 0.33% respectively on the outgoing week.
A clash between Moscow and 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 on the capital, as Reuters reported.
However, the challenge has raised questions about President Vladimir Putin's grip on power and concerns about possible disruption of the Russian oil supply.
Consultancy Rystad Energy said in a note late on Sunday it did not expect to see a significant increase in oil prices due to the "short-lived event."
Moreover, Goldman Sachs analysts said that markets may price in an increased likelihood of volatility in Russia, however, the impact will be limited as spot fundamentals have remained unchanged.
CMC Markets analyst Tina Teng said in a note, "China's economic growth has been a nightmare for commodity markets, particularly in oil and industrial metals."
During the outgoing week, The Bank of England raised its key interest rate by 50 basis points to 5%, seeking to curb the highest inflation in any major economy.
Moreover, Fed officials estimated rates would rise to 5.6% by the end of the year, according to their median projection, implying two additional quarter-point hikes following surprisingly persistent inflation and labor-market strength.
