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Deal
Oil prices and US equity futures USA They fell early on Monday as a landmark deal by OPEC and its allies to cut output by a record amount, giving investors no reason for lasting optimism about the economic outlook.
FILE PHOTO: A pedestrian in a face mask walks near an overpass with an electronic placard displaying stock information, following an outbreak of coronavirus disease (COVID-19), in the Lujiazui financial district of Shanghai, China, March 17, 2020. REUTERS / Aly Song
TOKYO: Oil prices and US stock futures. USA They fell into the trade early Monday as a landmark deal by OPEC and its allies to cut output by a record amount that gave investors no reason for lasting optimism about the economic outlook.
US mini S&P 500 futures USA They fell 1.54 percent, erasing a brief gain to a one-month high just after the start of trading.
Nikkei futures traded in Chicago suggest the Tokyo benchmark is likely to fall around 0.2 percent.
US crude futures fell to $ 22.67 a barrel, down 0.4 percent, as they quickly erased past gains to reach the lowest level since April 2.
Brent futures fell 0.67 percent to $ 31.27 a barrel, having risen to $ 33.99.
A group of oil-producing countries known as OPEC +, which includes Russia, said it had agreed to cut production by 9.7 million barrels per day (bpd) for May-June, after four days of marathon talks.
However, a more important question for investors is whether the new coronavirus pandemic, which has devastated global economic growth, will soon peak in the United States and Europe, as expected.
“While the panic sale we saw last month has faded, not many investors would want to chase stock prices higher as we are about to see more evidence of economic recessions,” said Masahiro Ichikawa, senior strategist at Sumitomo. Mitsui DS Asset Management.
OPEC + said in a draft statement seen by Reuters that it expected total global oil cuts to amount to more than 20 million bpd, or 20 percent of global supply, as of May 1.
That includes contributions from non-members, steeper voluntary cuts by some OPEC + members, and strategic purchases by the world’s biggest consumers, the sources said.
Still, that doesn’t quite make up for an estimated 30 million bpd drop in global fuel consumption caused by the COVID-19 pandemic.
“In the short term, the WTI may remain above $ 20 after the deal, but could fall below that level unless all countries follow suit with their words,” said Tatsufumi Okoshi, senior economist at Nomura. Securities.
Also in focus this week, US companies announce their earnings, starting with the big banks, and China releases its trade data on Tuesday and closely watched the gross domestic product data on Friday.
In the currency markets, risk-sensitive currencies were softer while the safe-haven dollar and yen found support.
The Australian dollar fell 0.3 percent to $ 0.6303, while the Mexican peso fell 0.4 percent to 23,430 per dollar.
The euro held steady at $ 1.0934 and the yen gained 0.15 percent to 108.34 per dollar.
(Edition by Sam Holmes)
