Oil prices drop $2 with most Asian markets closed for holidays

HONG KONG -- Oil prices fell more than $2 a barrel early Monday after the OPEC+ group of oil producing nations said it plans to increase output. U.S. futures fell

U.S. benchmark crude oil sank $2.21 or 3.8% to $56.08 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, lost $2.14 to $59.15 per barrel.

During the weekend, the OPEC+ group of eight nations announced it will raised its output by 411,000 barrels per day as of June 1, stepping up production increases.

The group said strong fundamentals were behind the decision, though analysts also speculated that it might reflect a desire to curry favor with U.S. President Donald Trump before he makes a visit to the Middle East later this month.

Prices have fallen nearly 20% in the past three months as traders have factored in the likely impact of U.S. President Donald Trump's trade policies on the global economy.

“Washington wants cheap energy, and Gulf producers still lean on U.S. security guarantees; the White House bears down, they listen,” Stephen Innes of SPI Asset Management said in a commentary.

“In that sense the U.S. President has become an unofficial swing vote inside OPEC+,” he said.

U.S. crude oil is down about 17% for the year and prices are falling to a point, however, where many producers can no longer turn a profit.

In stock trading, markets were closed in Shanghai, Hong Kong, Tokyo, Seoul and India. Australia's S&P/ASX 200 lost 0.7% to 8,182.90 while Taiwan's Taiex declined 2.1%.

The U.S. dollar slipped to 144.32 Japanese yen from 144.71 yen.

The euro climbed to $1.1334 from 1.1306.

On Friday, Wall Street extended its gains to a ninth straight day, the market’s longest winning streak since 2004. It has reclaiming much of the ground it lost after President Donald Trump escalated his trade war in early April.

The rally was spurred by a better-than-expected report on the U.S. job market and revived hopes that Washington will tone down its trade tensions with China.

The S&P 500 climbed 1.5% to 5,686.67. The Dow Jones Industrial Average added 1.4% to 41,317.43, and the Nasdaq composite rose 1.5% to 17,977.73.

The benchmark index is still down 3.3% so far this year, and 7.4% below the record it reached in February.

The gains were broad. Roughly 90% of stocks and every sector in the S&P 500 advanced. Technology stocks led the way. Microsoft rose 2.3% and Nvidia rose 2.5%. Apple, however, fell 3.7% after the iPhone maker estimated that Trump's tariffs will cost it $900 million.

Banks and other financial companies also made solid gains. JPMorgan Chase rose 2.3% and Visa closed 1.5% higher.

Employers added 177,000 jobs in April. That marks a slowdown in hiring from March, but it was solidly better than economists anticipated. However, the latest job figures don’t yet reflect the effects on the economy of Trump’s across-the-board tariffs. Many of the more severe tariffs that were supposed to go into effect in April were delayed by three months, except for those against China.

The job market is being closely watched for signs of stress amid trade war tensions. Strong employment has helped fuel solid consumer spending and economic growth over the last few years. Economists are now worried about the impact that taxes on imports will have on consumers and businesses, especially about how higher costs will hurt hiring and spending.

The economy is already showing signs of strain. The U.S. economy shrank at a 0.3% annual pace during the first quarter of the year. It was slowed by a surge in imports as businesses tried to get ahead of Trump’s tariffs.

Companies have been cutting and withdrawing financial forecasts because of the uncertainty over how much tariffs will cost them and how much they will squeeze consumers and sap spending.