OPEC and allies strike deal to end oil production cuts

SINGAPORE – Stocks in Asia-Pacific fell on Monday morning as oil prices fell after OPEC and its allies struck a deal.

The Nikkei 225 in Japan lost 1.41% in morning trading while the Topix index lost 1.44%. South Korea’s Kospi fell 0.96%.

In Hong Kong, the Hang Seng index plunged 1.61%. Mainland Chinese stocks were also lower, with the Shanghai Composite Index falling about 0.6% while the Shenzhen component was down 0.216%.

Australian stocks were also lower, with the S & P / ASX 200 falling 1.22%.

The MSCI’s largest Asia-Pacific stock index outside of Japan traded down 1.21%.

In the morning of Asian trading hours on Monday, futures contracts on international benchmark Brent crude fell 1.22% to $ 72.69 a barrel. US crude futures also fell 1.16% to $ 70.98 a barrel.

Shares of Asia-Pacific oil companies also fell in trading on Monday morning, with Santos in Australia falling 2.56%. Japan’s Inpex fell 2.84%, while Japan Petroleum Exploration plunged 3.19%. CNOOC shares in Hong Kong fell 1.85%.

OPEC and its allies on Sunday reached an agreement to phase out 5.8 million barrels per day of reduced oil production by September 2022. The coordinated increase in the group’s oil supply – collectively known as the name of OPEC + – will begin in August, OPEC said in a statement.

The development came as Brent has jumped more than 40% so far in 2021, with demand for crude increasing as the global economy recovers from the pandemic.

The US dollar index, which tracks the greenback against a basket of its peers, was at 92.70 after a recent rally below 92.4.

The Japanese yen was trading at 109.89 per dollar, stronger than the levels above 110.4 seen against the greenback last week. The Australian dollar changed hands at $ 0.738, below levels above $ 0.748 last week.

Correction: This article has been updated to reflect that OPEC and its allies reached a deal on Sunday to phase out 5.8 million barrels per day of reduced oil production by September 2022.