Asian shares dip on Monday, after a historic decline in production was decided by the world’s largest oil producers.
According to Marketwatch, most of the shares were lower in Asia on Monday while crude prices gained more than $1 per barrel after OPEC and other oil-producing nations agreed to cut production to reflect the pandemic-induced fall in demand.
Just hours before the markets started trading, Russia and OPEC and allies stroke an unprecedented production reduction of nearly 10 M bpd, or a tenth of global output, aimed at propelling collapsing prices and ending a price war.
According to Gurutrade, Nikkei 225 of Japan lost 2.33 per cent 19,043 in share trading. The Shanghai Composite index dropped by 0.53 percent to 2.782 at 0637 GMT. Meanwhile, the Kospi dropped by 1.72 percent before the South Korean session was closed. Hang Seng is rising by 1.38 per cent to 24,300.
Tencent Holdings gained 1.66 percent on Monday, and HSBC Holdings gained 2.76 percent, while CNOOC gained 2.88 percent. Honda Motor slipped 3.09%, Fast Retailing lost 3.71%, Recruit Holdings tumbled 7.59% on Monday.
Shares were down 0.68 percent in Singapore, 0.57 percent in Taiwan and 0.68 percent in Indonesia on Monday.
OPEC, Russia and other oil-producing countries decided on Sunday to collectively cut production by nearly 10 M bpd. It aimed to raise prices in the midst of a prolonged price war between Russia and Saudi Arabia in the midst of a global decline in demand due to the coronavirus pandemic.
But some analysts fear that production cutbacks won’t be enough to lift prices.
U.S.. WTI crude delivery for May increased by 2.90% to $23.42 per barrel. Meanwhile, June Brent crude added 2.10% to $32.11 per barrel at 0641 GMT.