HONG KONG: Oil prices soared almost 6% in Asian trade Monday morning after major producers led by Saudi Arabia announced a surprise cut of more than one million barrels per day (bpd).
The West Texas Intermediate contract jumped 5.74% to $80.01 a barrel, while Brent jumped 5.67% to $84.42.
The move by Saudi Arabia, Iraq, UAE, Kuwait, Algeria and Oman will be in effect from next month until the end of the year, and marks the biggest OPEC oil cut since the cartel slashed two million bpd in October.
The reduction came on top of a Russian decision to extend a cut of 500,000 barrels per day, and in spite of US calls to increase production.
The oil production cuts will fan fresh fears about inflation and put more pressure on central banks to hike interest rates further.
Market "sentiment is likely to take a knock... as higher levels of expected inflation assumes higher [for longer] interest rates", said Matt Simpson at City Index.
"And stocks likely won't appreciate this development, so we could be in for a rocky start to the week."
KSE-100 Index drops 2,002.55 points, or -1.69%, to close at 116,439.62
Passengers making advance bookings also be eligible for reduced fares, says PR
Salaries of federal minister, minister of state, and adviser increased to Rs519,000
Rs11.5bn were submitted to national kitty after decision of Lahore High Court
FinMin Aurangzeb briefs Natalie Baker on the govt’s macroeconomic reform agenda, says statement
Finance Minister Muhammad Aurangzeb says Pakistan in final phase of IMF negotiations
