Reports that U.S. oil producers are cutting output sent futures higher during Wednesday’s Asian trading session, the second consecutive session of gains for the battered commodity sector. Brent crude futures were trading at $36.79 per barrel as of 3:55 p.m. HK/SIN on Wednesday, and U.S. WTI futures were at $33.92 per barrel.
U.S. shale producers, lead by titan Occidental Petroleum, extended spending cuts that would reduce production after crude prices plummeted to three-year lows earlier this week. According to Reuters analysts, the bounce in oil prices isn’t expected to last, as tensions remain between oil giants Russia and Saudi Arabia, and the countries continue to battle for market share by reducing prices and increasing production.
Asian stock markets were broadly lower on Wednesday after a highly volatile day on Wall Street on Tuesday that left all three U.S. benchmarks up more than 4 percent. Australia’s ASX 200 lead the declines with a decline of 3.6 percent. South Korea’s Kospi fell 2.78 percent, and Japan’s Nikkei 225 was close behind with a 2.27 percent decline.
The dollar fell against the safe haven yen as traders sought safety in the face of continued global uncertainty. The greenback slid 0.559 percent to 105.02. The euro surged 0.42 percent against the dollar, trading at $1.133. The British pounded edged up 0.04 percent after the Bank of England announced an emergency interest rate cut by 50 basis points. The sterling was trading at $1.291. The UK also announced that its health minister, Nadine Dorries, has been infected with COVID-19. She is said to be in good condition.