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Brent crude futures were up 38 cents, or 0.5%, at $74.23 a
barrel by 1040 GMT. U.S. West Texas Intermediate crude (WTI) was
up 28 cents, or 0.4%, at $69.44. Both benchmarks gained as much
as 1.3% in early Asian trade.
A clash between Moscow and Russian mercenary group Wagner was
averted on Saturday after the heavily armed mercenaries withdrew
from the southern Russian city of Rostov under a deal that
halted their rapid advance on the capital.
However, the challenge has raised questions about President
Vladimir Putin's grip on power and some concern about possible
disruption of Russian oil supply.
"Crude futures opened about $1 a barrel higher on Monday in a
knee-jerk reaction to an aborted rebellion by the mercenary
Wagner group in Russia," said Vandana Hari, founder of oil
market analysis provider Vanda Insights.
"But (prices) quickly began to surrender the gains as a calmer
analysis indicated the situation in the country was stable for
the time being and posed no threat to its oil and gas supplies."
Goldman Sachs analysts said markets could price in a moderately
higher probability of domestic volatility in Russia leading to
supply disruptions, adding that the impact could be limited
because spot fundamentals have not changed.
The number of oil and natural gas rigs operated by U.S. energy
companies - an early indicator of future output - fell for an
eighth week in a row for the first time since July 2020, a
closely followed report showed on Friday.
Both Brent and WTI prices fell by about 3.6% last week on
worries that further interest rate hikes by the U.S. Federal
Reserve could sap oil demand at a time when China's economic
recovery has also disappointed investors.
"China's economic growth has been a nightmare for commodity
markets, particularly in oil and industrial metals," CMC Markets
analyst Tina Teng said in a note.
(Reporting by Noah Browning; Additional reporting by Florence
Tan and Sudarshan Varadhan; Editing by David Goodman)
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