Oil Gain Fails to Halt Fresh Slide on Asian Markets

A modest recovery in oil prices provided some respite for Asian energy firms Wednesday but stock markets extended losses while 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 10th 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 U.S. mining giant Anglo American said it would scythe almost two-thirds of its workforce and reduce investment by about $1 billion.

On Wednesday U.S. 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 0.7 percent in Sydney, Inpex gained 0.4 percent and JX Holdings added 1.6 percent in Tokyo while Hong Kong-listed CNOOC put on 1.3 percent in the afternoon.

However, the oil contracts are still struggling around seven-year lows and analysts said the gloom was likely to last for some time.

"We believe that the current crude oversupply in the global market will persist over the coming years, reinforcing our flat outlook for oil prices over 2015-2017," BMI Research said in a market commentary.

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.

- 'Further stimulus' -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 closed 1.0 percent off, Sydney fell 0.3 percent while Taipei, Singapore and Kuala Lumpur were also in negative territory.

Hong Kong lost 0.4 percent in the afternoon.

However, Shanghai edged up by the end of the day after a slightly better-than-forecast inflation reading for November and on hopes officials will unveil fresh measures to support the economy.

Consumer prices rose 1.5 percent last month, up from October and better than forecast in a survey by Bloomberg News.

But the reading remained well below China's annual target of an increase of "around three percent" announced in March.

The figures came a day after data showed imports and exports had tumbled again, indicating the world's number two economy is still in the tight grip of a painful growth slowdown.

Gerry Alfonso, a trader at Shenwan Hongyuan Group Co. in Shanghai told Bloomberg News: "The low inflationary environment clearly gives space for further stimulus. The market consensus is that there will be more cuts in the not-too-distant future."

- Key figures around 0710 GMT -Tokyo - Nikkei 225: DOWN 1.0 percent at 19,301.07 (close)

Hong Kong - Hang Seng: DOWN 0.4 percent at 21,803.28

Shanghai - composite: UP 0.1 percent at 3,472.44 (close)

Euro/dollar: UP to $1.0922 from $1.0892 late Tuesday

Dollar/yen: DOWN to 122.70 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)