Hong Kong: A modest recovery in oil prices provided some respite for Asian energy firms Wednesday but stock markets extended losses as China´s ongoing economic woes cast a pall over the region´s trading floors.
The cost of the black gold has plunged by almost a tenth since Friday´s refusal by the OPEC oil exporters´ group to agree a ceiling on output despite oversupply and anaemic demand across the globe.
The impact of the weak commodity price environment was also made stark Tuesday when US mining giant Anglo American said it would scythe almost two-thirds of its workforce and reduce investment by about $1 billion.
On Wednesday US benchmark West Texas Intermediate was up 1.7 percent in the morning while Brent added 1.2 percent.
Among regional energy firms BHP Billiton added almost one percent in Sydney, Inpex gained 1.3 percent in Tokyo and Hong Kong-listed CNOOC put on 1.7 percent.
However, the oil contracts are still struggling around seven-year lows and analysts said the gloom was likely to last for some time.
“We remain of the view that oil will stay below $50 a barrel into the foreseeable future,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., told clients according to Bloomberg News.
“The industrial metals and iron-ore thematics are basically facing the same factors that are influencing oil.”
A global supply glut, weak demand and the growth slowdown in China have combined with soaring production to send crude slumping more than 60 percent over the past 18 months.
Most Asian markets extended their losses of this week, tracking a downturn on Wall Street where all three main indexes ended in the red.
Tokyo was 1.1 percent off by lunch, Hong Kong lost 0.6 percent and Sydney fell 0.3 percent while Taipei, Singapore and Kuala Lumpur were also in negative territory.
Shanghai was 0.2 percent down as ongoing worries about China overshadowed data showing November inflation was just above expectations.
Consumer prices rose 1.5 percent last month, up from October and better than the forecast in a survey by Bloomberg News but well short of Beijing´s target rate of “around three percent”.
But the November reading remained well below China´s annual target of an increase of “around three percent” announced in March.
– Key figures around 0300 GMT –
Tokyo – Nikkei 225: DOWN 1.1 percent at 19,281.46 (break)
Hong Kong – Hang Seng: DOWN 0.5 percent at 21803.28
Euro/dollar: UP to $1.0912 from $1.0892 late Tuesday
Dollar/yen: DOWN to 122.78 yen from 122.97 yen
New York – Dow: DOWN 0.9 percent at 17,568.00 (close)
London – FTSE 100: DOWN 1.4 percent at 6,135.22 points (close)