Oil prices pare gains on ebbing supply fears after botched Russian mutiny

Oil prices pared early gains on Monday, with markets largely after an attempted insurrection in Russia stoked fears that energy supplies would be disrupted by potential unrest in one of the world’s largest oil producer nations.

The movements in oil prices tracked a broad relative calm in the financial markets after the unprecedented developments in Russia over the weekend. The armed rebellion by Yevgeny Prigozhin, leader of the Wagner group of mercenary fighters, posed the biggest threat to Vladimir Putin’s 23-year grip on power.

West Texas Intermediate futures and Brent crude were almost flat in midday Asia trade. West Texas intermediate futures rose by as much as 1.3% to just below $70 a barrel in early Asia trade after shedding almost 4% last week.

The MSCI Asia ex-Japan, a gauge of stocks trading in Asia outside of Japan, lingered at a three-week low, while currencies typically seen as safe havens were mixed.

“We have seen in the early market moves that risk off is being played in the commodity markets,” Chris Iggo, AXA’s Chief Investment Officer for Core Investments, told CNBC.

“The fear that any disruption in Russia could lead to further disruptions in the global energy market,” he added.

Wagner mercenaries led by Prigozhin were marching toward Moscow on Saturday, after reportedly taking control of southern city of Rostov. The armed rebellion was abruptly called off on Sunday.

Kremlin spokesman Dmitry Peskov said the criminal charges against Prigozhin were dropped after his forces turned back, state-controlled outlet TASS reported.

“Obviously this does show a level of unprecedented weakness for President Putin,” Eurasia Group president Ian Bremmer told CNBC Monday.

“But at the same time, while Putin was unprecedently tested, there was not a single high-level defection from the Russian military, from the Russian government or among the Russian oligarchs,” he added. “Anyone that believes that Putin is suddenly is on the brink of leaving power, also needs to recognize that’s not where we are.”