Volatile week for oil

Oil was volatile as investors weighed the possibility of more civil unrest in Russia following a brief weekend riot at a major OPEC+ producer. U.S. crude traded around $69 a barrel and Brent was steady after both benchmarks pared earlier gains by more than 1%. While Moscow was eerily calm after the end of the uprising led by Yevgeny Prigozhin, the head of the Wagner mercenary group, financial markets were relatively calm. “Crude has so far been the typical default response to unrest or uncertainty in a major producing country. It should have no impact on Russia’s oil and gas supply,” said Vandana Hari, founder of Vanda Insights in Singapore. Russia is a key producer in the OPEC+ coalition with Saudi Arabia, and any prolonged turmoil in the country could reverberate through global oil markets. The country’s war in Ukraine has already disrupted trade flows as major Asian consumers, including China, consider energy imports from Russia. Goldman Sachs said the impact on oil prices following the armed uprising in Russia could be limited because markets are focused on spot fundamentals that are generally unchanged. But RBC Capital Markets LLC said the risk of further civil unrest “should be factored into our oil analysis.” Oil is still about 13% lower this year in New York, in part because of Russia’s resilient exports, the Fed’s aggressive monetary tightening and China’s lackluster economic recovery. Recession alarms are also ringing in European bond markets.