Oil prices rose during Monday morning’s Asian trading session, as investors and traders began digesting the impact of the attempted mutiny against Russian President Vladimir Putin; while worries about a global slowdown remained.
According to Zenger News Pro, West Texas Intermediate futures maturing in August rose 0.65% during Monday morning Asian trading session, to trade at $69.68 per barrel. Brent futures maturing in August rose 0.73% to trade at $74.36 per barrel.
‘’The internal military struggle in Russia adds limited oil price pressure amid heightened tensions in Moscow, we do, however, believe that the geopolitical risk amid internal instability in Russia has increased,” said the Rystad Energy senior Vice President on a Bloomberg report.
Fears of a recession due to extended rate hikes amid sticky inflation appear to be balancing any upward price pressure due to geopolitical and supply risks. This is given the fact that Federal Reserve Chair Jerome Powell has indicated rates may be hiked by a further 50 basis points this year.
At the same time, higher-than-expected inflation and a subsequent surprise 50 basis points rate hikes by the Bank of England, seem to have unnerved investors who have begun weighing in on the possibility of extended rate rises in the U.S.
“It is our understanding that the White House was actively engaged yesterday in reaching out to key domestic and foreign producers about contingency planning to keep the market well supplied if the crisis impacted Russian output,” said RBC capital markets analyst Helima Croft.
According to a Reuters report, the analyst said there were worries that Putin would declare martial law that would stop workers from showing up to major loading ports and energy facilities, potentially impacting millions of barrels of exports,
The United States Brent Oil Fund LP closed 0.16% lower on Friday while the Vanguard Energy Index Fund ETF shed 0.88%.
Produced in association with Benzinga
Edited by Eunice Anyango Oyule and Judy J. Rotich
