HONG KONG: Asian markets retreated Wednesday, with energy firms dragged down by tumbling oil prices as fresh fears about a planned output cut by major producers was fanned by a report Russia will not take part.
Crude has been in the ascendancy since last month when the Organization of Petroleum Exporting Countries, and later Moscow, agreed to output cuts in a bid to support prices.
But they tumbled more than one percent Tuesday as the Russia-based Interfax news agency said the country’s envoy at OPEC, Vladimir Voronkov, had said output cuts are not “an option for us”.
The report came days after key OPEC member Iraq said it should be exempted from the final deal as it was fighting a war against the Islamic State group.
“They say talk is cheap and OPEC appears to be approaching the limits of its ability to jawbone oil higher without something concrete to put on the table,” Jeffrey Halley, senior market analyst at OANDA, said in a note.
Both contracts extended their losses Wednesday in Asia, putting pressure on regional energy firms, while eyes are on the release later in the day of US stockpiles figures.
Sydney-listed Oil Search sank more than three percent while CNOOC lost 2.8 percent in Hong Kong and Tokyo’s Inpex shed more than one percent.
Broader markets were also well into negative territory, with Tokyo down 0.2 percent by the break, Hong Kong losing 0.7 percent and Shanghai 0.3 percent off.
Sydney tumbled 1.5 percent as a surge in inflation tempered expectations that Australia’s central bank will cut interest rates any time soon.
Seoul and Wellington each fell more than one percent, while Singapore was also sharply lower.
Apple suppliers were mixed despite the US titan announcing a fall in revenue and profits, then issuing a below-par sales outlook for the crucial holiday period.
“Apple’s forward expectations aren’t great and it’s susceptible to more of a pullback,” James Audiss, Sydney-based senior wealth manager at Shaw and Partners, told Bloomberg News.
However, Seoul-based SK Hynix rallied three percent, Japan Display was up more than one percent in Tokyo but Taipei’s Hon Hai Precision and TSMC both turned lower.