OPEC and its allies reach agreement to end oil production cuts

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SINGAPORE – Shares in the Asia-Pacific region fell on Monday as oil prices fell after OPEC and its allies reached an agreement.

In Hong Kong, the Hang Seng led losses among the region’s major markets, closing 1.84% lower at 27,489.78.

Japan’s Nikkei 225 fell 1.25% to close at 27652.74 while Topix fell 1.3% to end the trading day at 1907.13. South Korea’s Kospi closed 1% lower at 3,244.04.

Stocks on the Chinese mainland closed mixed, with the Shanghai Composite Index little changed at 3539.12 while the Shenzhen component rose 0.138% to 14,992.90.

Australian shares were also lower, with the S&P/ASX 200 Index down 0.85% to close at 7,286.

MSCI’s broadest index of Asia Pacific shares outside Japan fell 1.39%.

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In the afternoon during Asian trading hours on Monday, international benchmark Brent crude futures were down 2.13% to $72.02 a barrel. US crude futures also fell 2.09% to $70.31 a barrel.

Oil stocks in the Asia-Pacific region also fell on Monday, with Santos in Australia down 2.71%. Japan’s Inpex is down 1.98%, while Japan Petroleum Exploration is down 2.35%. CNOOC shares in Hong Kong fell 1.72%.

OPEC and its allies reached an agreement on Sunday to phase out 5.8 million barrels per day of oil production cuts by September 2022. Coordinated increases in oil supplies from the group – collectively known as OPEC+ – will begin in August, OPEC and its allies said in a statement.

The development came as Brent is up more than 40% so far in 2021, with demand for crude oil rising as the global economy recovers from the pandemic.

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The US Dollar Index, which measures the greenback against a basket of its peers, was at 92.902 after the recent rally from the 92.4 low.

The Japanese yen traded at 109.86 per dollar, stronger than the levels above 110.4 seen against the dollar last week. The Australian dollar traded at $0.737, below levels above $0.748 seen last week.

Clarification: This article has been updated to reflect that OPEC and its allies reached an agreement on Sunday to phase out 5.8 million barrels per day of oil production cuts by September 2022.

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