Oil prices increased on Monday as traders weighed potential supply interruptions against worries about rising global demand, which might be exacerbated by political unrest in Russia.
The US West Texas Intermediate (WTI) futures advanced by 21 cents or 0.3 percent to $69.37 a barrel, while Brent oil futures rose by 33 cents or 0.5 percent to end at $74.18 a barrel.
A compromise that stopped the heavily armed Russian mercenaries’ Saturday assault on Moscow saw them withdraw from Rostov in southern Russia.
The decision aroused concerns about President Vladimir Putin’s hold on power despite the course reversal.
Fighters from the Wagner group put an end to their brief mutiny late on Saturday and started returning to their bases in exchange for assurances of their safety.
Yevgeny Prigozhin, their commander, will relocate to Belarus as part of the agreement brokered by Alexander Lukashenko, the president of Belarus.
Market analysts cautioned that due to Saudi Arabia’s vow to reduce output starting in July, the possibility of decreased US production, and the impending termination of U.S. strategic reserve releases, supply constraints in the coming months could become worse due to political instability in Russia.
On concerns that additional interest rate increases by the US Federal Reserve could reduce oil demand at a time when China’s economic recovery has also disappointed investors, both Brent and WTI prices plummeted by more than 3% last week.
In addition to a larger agreement by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to limit production beyond 2024, Saudi Arabia promised to make a significant reduction in its output in July. In July, it increased the cost of its Arab Light crude to Asian consumers to a six-month high.
As a result, Asian refiners are probably going to purchase more spot cargoes, like those from the United Arab Emirates, and less oil from Saudi Arabia for July.
Although Saudi Arabia and other OPEC members have frequently stated that they do not have a goal oil price in mind, some watchers of OPEC have claimed that higher oil prices are necessary for the group as a result of rising inflation.
According to OPEC Secretary General Haitham al Ghais, the world’s daily demand for crude oil is expected to increase by 23% to 110 million barrels by 2045.
The prediction comes a week after the International Energy Agency (IEA) stated that the increase of oil demand will decrease over the following few years, declining from 2.4 million barrels per day this year to 400,000 barrels per day in 2028, with peak demand in sight.
