OPEC Plan for Oil Output Disappoints Traders: Live Updates

Asia markets are mixed as holiday hits trading.

Markets in the Asia-Pacific region were mixed as of midday Friday, as investors in much of the world began a three-day holiday in a time of unsettling news about the coronavirus outbreak.

The Nikkei 225 index was up 0.2 percent midday, failing to follow a more than 1 percent rise on Wall Street on Thursday. Trading in the region was muted, as markets in the United States and much of Europe will be closed on Friday.

The biggest news for investors was in oil markets, where major producing countries were expected to hammer out a deal to slow production and bring to an end a clash over prices. Still, the cuts may not be enough to reassure oil markets or soothe concerns about the fate of countries where the economy depends heavily on petroleum production. Prices on oil futures markets fell on Thursday in the United States.

In other markets, mainland China’s Shanghai Composite index was down 0.7 percent. South Korea’s Kospi was up 0.4 percent, while in Taiwan the Taiex was down 0.2 percent. Markets in Hong Kong and Australia were closed for the holiday.

OPEC and Russia are said to reach a deal to temporarily trim oil output.

The Organization of the Petroleum Exporting Countries and other countries including Russia reached a tentative agreement on Thursday to temporarily cut large volumes of production, according to a person with knowledge of the matter.

OPEC and the other oil-producing countries agreed to cut about 10 million barrels a day, or about 10 percent from normal production levels, in May and June, said this person, who spoke on condition of anonymity because the announcement had not been made official.

Possible further trims could come from a meeting of the Group of 20 nations on Friday.

Negotiations hit a snag late Thursday over Mexico’s reluctance to cut its share of oil, reportedly 400,000 barrels a day, leaving the deal in limbo.

Even before that happened, oil prices fell because analysts and traders had hoped for a bigger reduction to prevent the buildup of a glut of oil. On Thursday afternoon, the West Texas Intermediate crude future contract, the American benchmark, was down more than 7 percent to $23.28 a barrel.

Amrita Sen, chief oil analyst at Energy Aspects, a research firm, said markets would not be impressed by the deal.

In addition, the new cuts won’t begin until May, allowing oil supplies to increase. There are also doubts about whether some of the countries party to the cuts, like Iraq, which often produces whatever it can, will really observe them. Ms. Sen said that OPEC and its collaborators were largely doing what they would be forced to do anyway.

Still, the meeting appears to be at least a start at tackling the most serious problem the oil industry and OPEC countries have encountered in decades. The decision to cut might go some way toward assuaging growing tensions between members of the cartel and the United States.

Clifford Krauss, Carlos Tejada, Stanley Reed and Daniel Victor contributed reporting.

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