BP and Shell jump as rising oil prices unleash new inflation risk following OPEC cuts

Oil prices skyrocketed after oil producers threatened to unleash a new wave of inflation in global markets through unexpected cuts in crude production.

West Texas Intermediate (WTI) was up as much as 8% in early trading to top $79 a barrel at 7 a.m., while Brent oil rallied nearly 5% to near $84.

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What happened from one day to the next

Oil prices rose Monday after Saudi Arabia and other OPEC+ oil producers announced a surprise round export cuts, a potentially ominous sign for global inflation.

Brent oil futures rose $5.16 to $85.05 a barrel on news output would be cut by about 1.16 million barrels a day, while US crude rose $4.88 to $80.55.

Meanwhile, Hong Kong stocks opened slightly lower after a strong rally last week as the large drop in oil production added to inflation concerns.

The Hang Seng index lost 0.10 percent to 20,379.50, but the Shanghai Composite Index rose 0.14 percent to 3,277.34 and the Shenzhen Composite Index on the second Chinese stock exchange rose 0.11 percent to 2,127.10.

Tokyo stocks opened higher, with the benchmark Nikkei 225 index rising 0.58 percent to 28,203.35 at open, and the broader Topix index rising 0.57 percent to 2,015.01.