Oil Gains on OPEC+ Deal

Global equities weakened on Monday as investors braced for more indications of economic damage from the coronavirus pandemic while oil prices rose in choppy trade following a landmark deal by OPEC and its allies to cut output, Reuters reported.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 3.9% at $23.6 per barrel in a volatile session, having fallen more than 3% to $22.03 earlier in the day.

Those moves came after a group of oil producing countries known as OPEC+, which includes Russia, agreed to reduce production by 9.7 million barrels per day (bpd) for May-June, after four days of marathon talks.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 0.3%. The Nikkei .N225 fell 1.9%, South Korean shares .KS11 dropped 1.3% while China’s CSI300 index .CSI300 lost 0.5%.

“The combined OPEC+ and G-20 cuts should set in place a bottoming process for oil prices and significantly limit the tail risk of free-falling into the single digits in our view,” Bank of Singapore, the private banking arm of OCBC, said in a report.

International benchmark Brent futures LCOc1 rose 2.7% to $32.65 per barrel but were trading below the day’s highs.

Oil prices have slumped more than 50% from their January peak as the novel coronavirus pandemic brought the global economy to a standstill and hit fuel demand.

Investors are now looking to see if the novel coronavirus pandemic, which has battered global economic growth, will soon peak in the United States and Europe, as had been initially expected.

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