OPEC – Crude oil prices rose after major oil-producing countries agreed to extend a production cut of 10 million barrels of oil per day through the end of the month of July in order to counter the blow in the demand due to the coronavirus outbreak.
U.S. crude for July delivery gained 27 cents to $39.82 a barrel in electronic trading on the New York Mercantile Exchange. While Brent crude in the international standard added 54 cents to $42.84 a barrel.
Earlier in the January-March quarter, Japan’s government reported that the economy contracted at a 2.2% annual rate, however, Nikkei 225 index rose 0.9% to 23,075.73 against the initially estimated minus 3.4%.
In other parts of Asia, Hang Seng of Hong Kong gained 0.4% to 24,871.34. The Shanghai Composite index also climbed up by 0.4%, to 2,941.92. The Kospi of South Korea increased by 0.2% to 2,186.11. opec while Australian markets were closed for a holiday.
These trends are raising hopes that the worst part of the recession may have already passed. However, economists from all around the globe cautioned that many risks still lie on the road towards full recovery.
Meanwhile, employers added nearly 2.5 million workers to their payrolls while the economists were expecting the employers would slash another 8 million jobs.
The U.S. benchmark is now down just 5.7% from its record set in February after plunging nearly 34% earlier this year when recession worries were peaking. The Dow Jones Industrial Average gained 3.2% to 27,110.98, and therefore the Nasdaq composite rose 2.1%, to 9,814.08. The Russell 2000 of small-cap stocks jumped 3.8%.
However, analysts and economists are expecting a full recovery in the U.S. economy is still far ahead. The unemployment rate will remain above 13%.
OPEC and its allies chose to increase their production cut of about 10% of worldwide output through the top of July to curb excess production that has been depressing prices as global aviation remains largely grounded thanks to the pandemic. OPEC has 13 member states and is essentially dominated by oil-rich Saudi Arabia.