KUALA LUMPUR (June 26): In contrast to the dynamics a year ago, the global energy markets are keeping a closer eye on economic developments rather than geopolitics, according to S&P Global vice chairman Daniel Howard Yergin.
He said energy markets have shown very little reaction to Russian mercenary group Wagner Group’s failed mutiny against President Vladimir Putin, noting that no disruptions have emerged in response to the development.
At the time of writing, Brent crude oil prices were up 0.5% at US$74.22 per barrel, trading near its one-year low. Meanwhile, liquefied natural gases (LNG) prices to Japan were at US$11.83 per mmbtu, down 1.9%.
Rather than geopolitical developments surrounding the Russia-Ukraine conflict, which primarily influenced the market last year, Yergin noted that economic developments are instead the dominant force for 2023.
“In other words, right now, what’s really dominating the market is economics and not geopolitics,” he said at a press conference after the conclusion of the first day of the Energy Asia 2023 conference here on Monday (June 26).
He explained that markets are lying in wait for a stronger rebound from China, as well as the impacts surrounding the effect of the high interest rates in the US and other countries in terms of economic repression.
Yergin said that while the second half of 2023 is only four days away, the market has yet to see fundamentals tighten, adding that there is not much geopolitical impact on the market now, as it saw in 2022.
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