Asian shares extend global rally; oil prices jump on Saudi cuts

Asian shares extend global rally; oil prices jump on Saudi cuts

SYDNEY: Asian shares extended a global rally on Monday on optimism the Federal Reserve would pause its rate hikes this month after a mixed U.S. jobs report, while oil jumped as Saudi Arabia pledged big output cuts in July.

Brent oil jumped $1.82, or 2.4%, to $77.95 a barrel, while U.S. crude climbed $1.77, or 2.4%, to $73.51. Oil prices have recently come under pressure amid heightened concerns about China's slowing economic recovery.

Oil rose as Saudi Arabia announced it would cut its output to 9 million barrels per day in July, from around 10 million bpd in May, the biggest reduction in years, while a broader OPEC+ deal to limit supply into 2024 also underpinned futures.

"With Saudi Arabia protecting oil prices from sliding too low ... we think oil markets are now more prone to a shortfall later this year," said Vivek Dhar, a mining and energy commodities strategist at Commonwealth Bank of Australia.

"We think Brent futures will rise to $US85/bbl by Q4 2023 even with a tepid demand recovery in China factored in."

On Monday, Japan's Nikkei surged 1% to a 33-year high, Australia's resources-heavy shares gained 1% and South Korea's KOSPI rose 0.5%.

S&P 500 futures dipped 0.1% and Nasdaq futures