Oil prices soared Monday after top producers unveiled a shock output cut of more than a million barrels, while equities mostly rose after data showed US and European inflation eased further last month.
\nHowever, the decision by the Organisation of the Petroleum Exporting Countries OPEC+, the cartel, which has other top non-OPEC oil-exporting nations, fanned concerns about a fresh spike in prices that could put pressure on central banks to push interest rates higher.
\nBoth main crude contracts jumped almost six per cent at one point following the cut by Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Algeria and Oman, which was the biggest since the group slashed two million barrels per day in October.
\nIt came on top of a Russian decision to extend a cut of 500,000 barrels per day, and in spite of US calls to increase production.
\nA Saudi energy ministry official \u201cemphasised that this is a precautionary measure aimed at supporting the stability of the oil market\u201d, according to the official Saudi Press Agency.
\nCrude prices have come down over the past year as concerns about a possible recession caused by higher borrowing costs have offset supply worries sparked by sanctions on Russia over its invasion of Ukraine.
\n\u201cThe production cut, coming at a time of an uncertain global demand environment clearly shows OPEC was not happy with the movement in the oil price which had fallen over recent months,\u201d said National Australia Bank\u2019s Tapas Strickland.
\nAnalysts said the decision could deal a blow to markets, which had rallied in recent weeks on optimism that the recent banking sector turmoil could force the US Federal Reserve to end its rate hike drive sooner than expected.
\n\u201cFor equity investors, this could be a rude awakening, as markets imply a Goldilocks outlook of reduced discount rates but no recession,\u201d said Lazard Limited Company Ronald Temple.
\n\u201cThe OPEC+ production cut is another reminder that the inflation genie is not back in the bottle.\u201d Still, the mood on Asian trading floors was upbeat, with most markets tracking a strong rally on Wall Street in response to news that US and eurozone price rises had slowed further.
\nThe Personal Consumption Expenditures (PCE) Price Index, the Fed\u2019s preferred measure of inflation, slowed to an annual rate of 5 per cent in February from 5.3 per cent in January.
\nMeanwhile, eurozone prices rose 6.9 per cent in March, well down from 8.5 per cent in February, beating expectations as energy prices eased.
\nIn early trade, Shanghai, Sydney, Singapore, Manila and Jakarta all rose, though Hong Kong dipped after last week\u2019s rally. Seoul and Wellington also slipped.
\nTokyo rose despite the Bank of Japan\u2019s closely watched Tankan survey showing confidence among the country\u2019s largest manufacturers falling to its lowest level in more than two years.
\nHowever, US futures dipped as Treasury yields climbed on bets of further monetary tightening by the Fed.
\nRussia says oil cuts \u2018in interests\u2019 of energy markets
\nMeanwhile, Russia said oil output cuts are \u201cin the interests\u201d of global markets. \u201cIt is in the interests of global energy markets for world oil prices to remain at a good level,\u201d Kremlin spokesman Dmitry Peskov told reporters.
\n\u201cWhether other countries are happy with this or not is their business,\u201d he added. The decision could anger the United States, which had already criticised the OPEC+ oil cartel, led by Saudi Arabia and Russia, over a previous cut in production last year.
\nRiyadh and other major oil producers announced Sunday a production cut of more than one million barrels per day, calling it a \u201cprecautionary\u201d move aimed at stabilising the market.
\nRussia said it would extend until the end of the year its own voluntary production cut of 500,000 barrels per day, a measure seen by experts as a way of making prices go up and counteracting the effect of international sanctions.
\nRussia\u2019s deputy prime minister in charge of energy, Alexander Novak, said the measure was justified by the \u201chigh volatility\u201d and \u201cuncertainty\u201d on the oil market. \u201cThe predictability of the global oil market is a key element to ensure energy security,\u201d he said in a statement.
\nOil prices shot up on Monday, with both main crude contracts jumping around eight percent at one point.<\/p>\n","protected":false},"excerpt":{"rendered":"
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