Asian markets fell in early trading Monday, after the world’s major oil producers agreed to a historic production cut.
Japan’s NIkkei NIK, -1.83% declined 0.8% and South Korea’s Kospi 180721, -1.12% fell 0.7%. The Shanghai Composite SHCOMP, -0.33% dipped 0.2% while the smaller-cap Shenzhen Composite 399106, -0.55% slipped 0.4%. Benchmark indexes in Taiwan Y9999, -0.34% and Singapore STI, -0.17% were about flat, while stocks gained slightly in Indonesia JAKIDX, -0.68% . Markets in Hong Kong, Australia, New Zealand and Europe are closed for the Easter Monday holiday.
On Sunday, OPEC, Russia and other oil-producing nations agreed to an unprecedented production cut of nearly 10 million barrels a month, in a bid to strengthen prices amid a monthslong price war between Saudi Arabia and Russia and a global drop in demand due to the coronavirus pandemic.
But some analysts worried that the production cut would not be enough to boost prices.
“With a demand shock estimated at between 15 to 30 million barrels of oil a day, depending on who you talk to, it is clear that the OPEC+ agreement contains more hope than reality,” wrote Jeffrey Halley, senior Asia Pacific market analyst at Oanda, in a note. “The entire construction is underwhelming, to say the least.”
West Texas Intermediate crude for May delivery CLK20, +4.56% rose about 5%, while June Brent crude BRNM20, +4.19% , the global benchmark, gained 1%.
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