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Oil Prices Near $74

barel nafta cijena
barel nafta cijena / Image by: foto

Oil prices remained below the $74 mark on international markets on Monday as concerns about the economy outweighed geopolitical supply risks due to the rebellion of a group of mercenaries against the Russian government.

On the London market, the price of a barrel was almost unchanged after noon compared to last week’s closing trade, amounting to $73.82. There were no significant changes on the American market either, where a barrel traded at $69.02.

Markets closely monitored the outcome of the Wagner mercenary group’s rebellion against the government in Moscow, which erupted on Friday evening and subsided in less than 24 hours. The Wagner group withdrew from the occupied headquarters of the Russian army in Rostov-on-Don, in southern Russia, and halted their march on Moscow in exchange for amnesty, which alleviated fears of disruptions in the supply of Russian barrels.

According to analysts at the American investment bank Goldman Sachs, markets could factor in moderately higher chances of instability in Russia and potential supply disruptions, but the impact on prices could be limited as supply and demand in the physical market remain unchanged.

– Geopolitics is not currently having much impact on the market. The economy is dominating, not geopolitics – explained Daniel Yergin from S&P Global.

Last week, markets were concerned by the announcement from the U.S. central bank that it has not yet finished its cycle of interest rate hikes, which could slow economic growth and demand for oil.

The Fed’s announcement coincided with disappointing data from the Chinese economy.

– Chinese economic growth has been a nightmare for commodity markets, especially for the oil and industrial metals markets – wrote CMC Markets analyst Tina Teng in a note.

In the U.S., a two-month decline in the number of active drilling rigs signals reduced supply, according to a closely watched report released on Friday.

The Organization of the Petroleum Exporting Countries (OPEC) separately announced that the price of a barrel of its members’ oil basket fell by $2.69 on Friday, to $74.14.

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