Oil jumps 3.01% as OPEC considers cut

TOKYO Oil jumped on Monday as OPEC considers a cut to output this week, while Asia shares were mixed with holidays in the Asia-Pacific region likely to result in thin trading.

The U.S. crude rose by 3.01 per cent to $81.88 a barrel after OPEC sources told Reuters that oil production could be cut by between 500,000 and one million barrels a day. Brent crude rose 2.95 per cent to $87.65 per barrel.

On the first trading day of the quarter, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.43 per cent, on course to decline for a fourth straight session.

The S&P ASX 200 Index fell 0.15 per cent in Australia, where some states are observing a public holiday.

Japan's Nikkei 225 index was up 0.72 per cent after upbeat quarterly earnings from Mimasu Semiconductor boosted chip shares.

South Korea has a national holiday on Monday, while China has just entered Golden Week and Hong Kong has a holiday on Tuesday.

ING's regional head of research Robert Carnell said that trading is likely to be thin due to the holidays.

The dollar was trading flat against the yen at 144.75 after hitting a high of 144.89 overnight. In Japan's finance minister Shunichi Suzuki said this morning that the government would take decisive steps to prevent currency moves.

The September data for the U.S. ISM manufacturing index will be released later in the day.

ISM manufacturing is unlikely to hinder the optimism surrounding the US economy that has been building up further with positive economic indicators released over the last few weeks, according to Saxo Bank market strategist Redmond Wong.

The Reserve Bank of Australia is expected to meet on Tuesday, with markets expecting another 50 basis point rate hike, as well as the release of CPI inflation data from Japan.

Spot gold went up 0.47 per cent to $1,667. An ounce is 2208 an ounce.