SINGAPORE Reuters - Oil nudged higher in early trade on Monday as an abortive weekend mutiny by Russian mercenaries raised questions about crude supply, though other financial markets started steadily with investors unsure of any further immediate implications.
Brent crude futures were up 1.3% to $74.78 a barrel, and U.S. crude was up by the same margin to $70, recouping a few of losses made last week. Currency markets were generally steady as S&P 500 futures were up 0.2%.
On Saturday, Russian mercenaries made a short-lived revolt, seizing the southern town of Rostov and advancing on Moscow, demanding the removal of Russian military commanders in charge of the war in Ukraine.
The private Wagner army then withdrawed following a deal guaranteeing their safety and the exile of their leader, Yevgeny Prigozhin, to Belarus. The consequences for the Ukraine conflict were not clear, though the conflict between Russian President Vladimir Putin's authority was the most significant in years of his leadership.
Geopolitical risk has increased due to internal instability in Russia, said Jorge Leon, a Rystad Energy analyst. If the situation does not improve, we will be likely to see a marginal uptick in oil prices in the near future. U.S. Secretary of State Antony Blinken said the crisis in Russia could take months to play out, while Italy's foreign minister said it had shattered the myth of Russian unity.
The markets were already on edge of a darkening growth outlook, as China's post-pandemic recovery stalls and the global interest rates remain high, and traders were unwilling to take any new positions on the basis of Russian events.
The Australian dollar remained stable at 0.6682, a decrease in risk-sensitive currencies. The euro rose to $1.0906 from $1.0906 last week and sterling held at $1.2722.
The market can get its head around working out if there are implications, says Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney.
However, it is clear that the power of Vladimir Putin is weakened in this regard. It is possible that the Ukrainians may be emboldened to be upping their counteroffensives, but without any visible progress, traders in Asia would be focused on China.
China returns from holidays with the yuan down sharply in offshore trade, leaving investors looking to the morning's fix of the onshore trading band for signs of the central bank's level of comfort with the slide.
The foreign yuan was traded at 7.21 per cent at a high of 7.21 ad.
The yen, which has been in a slide as global interest rate expectations rise and Japan's central bank remains steadysteadily dovish, remained stable at 143.57.
Japan's top currency diplomat, Masato Kanda, said on Monday that authorities would respond to any excessive moves and did not rule out intervening as happened last year.