Crude Oil Prices Fluctuate Amidst Military Situation in Russia and Short Supply Outlook

As per the recent assessment, Crude Oil prices have experienced a rising trend in the third week of June 2023 amid recently growing geopolitical tension within Russia, affecting the overall pricing dynamics. The WTI Crude Oil has witnessed a hike of 2% to settle at USD 70.88 per barrel, with Brent Crude oil climbing 1.8% to settle at USD 75.69 per barrel.

Before falling back, Crude Oil's market prices rebounded globally after the Russian mercenaries' insurrection. Russian Mercenary group Wager was involved in a clash with Moscow against President Putin after withdrawing from a deal that halted their rapid advance on the capital. This created the military coup, which raised concern about political instability amid the dormant impact on the Crude Oil supply from one of the largest producers. Due to the rising geopolitical tension, traders assumed that Putin would declare martial law, potentially faltering millions of export barrels. Moreover, Wagner Group could attack Russian pipelines exporting to Turkey or Eastern Europe, disrupting the supply chain of Crude Oil. The terror of the supply cut of Crude oil hampered the overall pricing trend. However, this situation's threat diminished as Belarus intervened and controlled the situation before it intensified.

As per the data, US Crude oil inventories declined by 3.8 million barrels in the last week to 463.3 million barrels, impacting the prices. Furthermore, Saudi Arabia, the world's largest exporter, announced that oil production would be cut by 1 million barrels per day from July 2023, affecting the trading outlook. Additionally, a decline in oil production has been experienced by western Canadian Crude Oil production due to the accelerated spread of wildfire across Alberta. Trading barrels are likely to be reduced for West Texas Intermediate due to the upcoming Juneteenth holiday in the US. 

The sluggish economic growth of China and the US have made Crude oil prices volatile. Recently, China has announced an interest rate cut to stimulate the economy and trading growth, which has boosted demand for Crude oil. Additionally, the demand for Crude oil in certain Middle Eastern countries has also accelerated due to the rise in economic activity.

As per ChemAnalyst, Crude oil prices would likely fluctuate within the nano-range as the US government plans to keep the market well supplied to help mitigate the impact of this disruption on oil prices despite the crisis evoked due to the rebellious Russian moment. Thus, prices are expected to maintain overall stability (with minor fluctuations) in the coming week in the global market.