Oil surges after output cuts, strong dollar weighs

The agreement between OPEC and a number of other oil producing nations was the first joint action since 2001, following more than two years of low prices that strained many government's budgets and spurred unrest in countries from the Middle East to Latin America. Brent futures for February delivery rose 4.4 percent to $56.72 per barrel, with U.S. crude rising 4.8 percent to $53.98 per barrel in Asian trade. The jump in oil prices comes in the wake of a renewed focus on inflation after data on Friday showed a rare spike in producer prices in China, prompting investors to worry that inflationary pressures are making a come back globally. The 10-year U.S. Treasuries yield rose as high as 2.5 percent in Asian trade, matching its 2015 peak. European shares were expected to open higher following strong gains in the previous week. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.5 percent after posting its biggest weekly rise in nearly three months last week. But energy plays in Hong Kong and Shanghai such as CNOOC and PetroChina were among the top gainers. Japan's Nikkei ended up 0.8 percent at its highest closing level since mid-December last year. The euro changed hands at $1.0556. Analysts at BBH expect a rebound to 1.07 per dollar if the 1.05 level is not broken. Spot gold steadied at $1,157.76 per ounce after hitting its lowest levels since early February.