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Hopes for higher oil prices push ASX to three-week high

Optimism that the US government will provide more financial support to its economy and corporations, and hopes OPEC+ and Russia will meet this week to cut oil production boosted markets on Monday.

Wall Street futures pushed the Australian market to a three-week closing high and a one-day gain of 4.3 per cent, with the benchmark S&P/ASX 200 index closing nearly 220 points higher at 5286.8 points.

The energy sector out-performed with gains of 5.7 per cent, boosted by stocks like Beach Energy gaining 10.4 per cent to $1.43. Woodside Petroleum gained 6.3 per cent to $20.95.

“Now, it’s probably a matter of time before the OPEC+ agrees on a sizeable production cut of around 10 million barrels per day to curtail the historical fall in oil prices,” senior analyst at Swissquote Bank, Ipek Ozkardeskaya, said.

“Saudi [Arabia] has the willpower to clinch a deal, while Russia desperately needs it at this point. Both countries also want to see the US joining in, but Donald Trump is torn between his distaste of OPEC raising prices artificially and hurting American drivers, and the cheap oil’s short-term negative impact on equity prices.”

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