Prigozhin’s coup. The markets reacted
The markets have been closely following the news of the power struggle in Russia, and recent developments have caused a stir. Yevgeny Prigozhin, the owner of the mercenary Wagner Group, made a shocking claim on Friday. He stated that troops from the Russian regular army had attacked his fighters’ camp, resulting in numerous casualties. Prigozhin announced a “restoration of justice” in the army and demanded the removal of Sergei Shoigu, the Minister of Defense, with whom he was in conflict. In a bold move, the Wagnerians captured the headquarters of the Southern Military District in Rostov-on-Don and then directed their forces towards Moscow.
The implications of this rebellion are uncertain, and market experts are trying to assess the potential impact. Ray Attrill, head of currency strategy at National Australia Bank, stated, “I don’t think the market can figure out if there will be any implications of this rebellion.”
Oil prices have also been affected by the situation in Russia. A barrel of West Texas Intermediate crude for deliveries in August trades at $69.52 at NYMEX in New York, representing a 0.55 percent increase on a year-on-year basis. Brent crude oil for August deliveries on ICE is priced at $74.33 per barrel, up by 0.66 percent.
Goldman Sachs analysts, including Daan Struyven and Callum Bruce, have predicted that the higher risk of lower supply at some point may put upward pressure on oil prices. However, they also mentioned that the initial impact should be limited.
Analysts from RBC Capital Markets have expressed concerns about the possibility of imposing martial law in Russia and its potential impact on the workforce in ports and oil production facilities. They wrote in a report, “The immediate challenge to the Putin regime appears to have subsided. However, the risk of further civil unrest in Russia now needs to be factored into our analysis of the oil outlook for the second half of the year.”
Despite the uncertainty surrounding the situation in Russia, Adrian Zuercher, investment director at UBS Global Wealth Management, believes that recent developments have not caused significant volatility in the markets. He stated, “Recent developments in Russia are not an element that causes uncertainty or volatility in the markets. You can see that market reactions have been muted so far.”
In addition to the situation in Russia, investors are also analyzing the outlook for interest rates. Mary Daly, the president of the Federal Reserve Bank of San Francisco, has forecasted two more rate hikes this year.
However, there is a growing risk of investors withdrawing from oil trading due to interest rate hikes in the EU and disappointing economic data from China, according to Dennis Kissler, senior vice president of trade at BOK Financial.
As the situation in Russia continues to unfold, the markets will closely monitor any further developments and their potential impact on oil prices and global economic stability.
Source: 2023-06-26 08:38:34
How has the potential disruption in Russian oil production and exports affected the market sentiment in the PAA industry?
Cent decrease. The uncertainty surrounding the power struggle has led to concerns about potential disruptions in Russian oil production and exports.
The Russian ruble has also been impacted by these developments. The currency has weakened against the US dollar, with the exchange rate reaching 72.75 rubles per dollar, a decrease of 0.4 per cent. Investors are cautious about the political instability in Russia and its potential impact on the economy.
Furthermore, global markets have also reacted to the news. European stock markets have seen a decline, with the FTSE 100 index in London down 0.7 per cent and the Dax index in Frankfurt down 0.5 per cent. Investors are monitoring the situation in Russia closely and adjusting their positions accordingly.
The uncertainty surrounding the power struggle in Russia and the potential impact on the economy and global markets has resulted in a cautious market sentiment. Investors are closely watching the developments and are prepared to adjust their strategies as the situation unfolds.
“Prigozhin’s Coup Sends Shockwaves Through Oil Markets: Curious to see how experts’ predictions and global reactions unfold. The ripple effects on oil prices and geopolitical stability can be momentous.”
This article provides insightful analysis on Prigozhin’s coup and its impact on oil markets. The predictions and reactions discussed by experts offer valuable perspectives for investors and industry players to navigate these uncertain times.