Gains in oil prices evaporated on Monday after a brief and chaotic insurrection in Russia, with investors questioning whether the turmoil in Moscow could disrupt global energy supplies.
US WTI crude briefly climbed 1.3% during Asian trading hours. But it later gave up those gains, last trading flat. Brent crude, the international benchmark, inched up 0.1%, trimming earlier advances. Both futures lost nearly 4% last week.
Russia glimpsed the threat of armed insurrection over the weekend, with Wagner Group mercenaries marching toward Moscow as President Vladimir Putin vowed retribution, before a sudden deal seemed to defuse the crisis as quickly as it had emerged.
Although the immediate risk of bloodshed appears to have dissipated, much remains uncertain. US Secretary of State Antony Blinken said Sunday that the insurrection shows "cracks" in Putin's role as a leader of the country.
"The potential risks to watch may be on any renewed opposition from the Russian public to Putin's leadership," said Yeap Jun Rong, market analyst at IG Group.
Signs that global energy demand could weaken this year as economies slow have pushed US crude prices down by nearly 14% so far this year to just under $70 a barrel. (It peaked above $120 a year ago.) The international benchmark, Brent crude, is down by a similar margin.
But anything that could jeopardize Russia's ability to keep supplying global energy markets will be watched anxiously by policymakers in the West and by the country's biggest customers in Asia.
Stocks choppy
Asian stock markets were choppy on Monday.
Japan's Nikkei 225 opened lower but soon reversed its losses and edged up 0.2%. South Korea's Kospi also rebounded from opening losses and rose 0.5%. Hong Kong's Hang Seng Index traded slightly lower amid a seesaw session.
But China's Shanghai Composite declined 0.7%, and Australia's S&P/ASX 200 lost 0.5%.
"Stocks could get a momentary lift" on hopes that the Wagner insurrection could mark the start of an earlier end to the Ukraine conflict, but the weight of the current economic slowdown in the US and the continuation of higher interest rates are likely to drag stock prices lower, said Clifford Bennett, chief economist at Australia's ACY Securities.
Last Friday, global markets fell broadly as investors became increasingly worried that more interest rate hikes by central banks would tip major economies into a prolonged recession.
Federal Reserve Chair Jerome Powell said last Wednesday that further rises in interest rates were likely necessary this year to bring US inflation down to the central bank's 2% target.
This was followed by a sharper-than-expected hike in UK borrowing costs by the Bank of England Thursday, which opted for an increase of half a percentage point after data earlier this week revealed surprisingly stubborn inflation.
And then on Friday, data showed that Japanese inflation excluding fresh food and energy costs hit a 42-year high of 4.3%, fueling speculation the Bank of Japan might rethink its loose monetary policy and start tightening.