HONG KONG: Energy stocks rose in Asian markets on Tuesday after oil extended gains overnight on hints from a Russian official at a possible production freeze in cooperation with OPEC.
Prices eased in Asian trade but held above $45 a barrel after rising in New York for the third straight day and helping push US stocks to fresh records.
In an interview with the Saudi newspaper Asharq al-Awsat, Russian Energy Minister Alexander Novak was quoted as saying that his country was working with Saudi Arabia to achieve oil market stability.
The remarks came after Saudi Arabia’s oil minister said last week that an informal meeting of the Organization of Petroleum Exporting Countries (OPEC) in Algeria next month would be an occasion for producers to discuss “any possible action”.
In morning trade, West Texas Intermediate was at $45.45 while Brent was at $48.03.
“Oil prices continued their three-day rally on Monday with WTI oil adding another 3.2% as speculation of some sort of OPEC deal escalated,” Angus Nicholson, a strategist at IG Markets, said in a note.
“This broad-based rally in commodities helped spur risk-on sentiment in equity markets, pushing US markets to new all-time highs.”
Tokyo was down 0.3 percent as the yen climbed against the dollar, but petroleum-linked stocks rose, with explorer Inpex rising 2.1 percent and refiner JX Holdings up just more than two percent.
A rally in the yen has hit Japanese exporters, making them less competitive overseas and denting profits.
The lacklustre start also followed news Monday that growth in the Japanese economy was flat in the April-June period, weighing on sentiment.
Sydney fell slightly, but energy and mining shares bucked the trend, with Woodside Petroleum jumping 1.5 percent, BHP Biliton advancing 0.4 percent and Whitehaven Coal up 3.7 percent.
In Kuala Lumpur, Seoul and Bangkok energy stocks were also among the best performers.
Shanghai, Hong Kong ease
In Chinese markets, trading was subdued by mid-morning despite opening higher.
Shanghai and Hong Kong had been lifted in the previous session after the China Securities Regulatory Commission said Friday that the Shenzhen-Hong Kong Stock Connect scheme would be launched this year.
This was in spite of fresh economic data last week that seemed to show slowing growth in the Asian powerhouse.
China launched a landmark “stock connect” between the Shanghai and Hong Kong exchanges in late 2014, which allowed foreign investors to trade selected stocks on Shanghai’s tightly restricted exchange and let mainland investors buy shares in Hong Kong.
But Shanghai lost 0.2 percent and Hong Kong was flat at around 0245 GMT.
“Trading across the region is… subdued,” Michael McCarthy, a chief market strategist in Sydney at CMC Markets said in an email commentary.
“Currency markets are becalmed, and gold and oil are steady at higher levels. Naturally, energy and material stocks are finding support, but volumes indicate an overall lack of investor interest.”