Asian energy firms dip after oil deal, eyes on Iran-Iraq talks
Sydney, Seoul, Wellington and Taipei were also comfortably higher
HONG KONG (AFP) - Energy firms retreated in Asia Wednesday after an oil output freeze by Saudi Arabia and Russia disappointed investors, but crude prices rebounded ahead of a meeting between producer giants Iran and Iraq.
The commodity had enjoyed a surge from Friday to early Tuesday as Moscow and Riyadh -- the world s two biggest producers -- prepared for talks on a rout that has seen the cost of a barrel collapse and hammered global markets.
But the conditional agreement between Saudi Arabia -- the de facto leader of OPEC -- Russia, Venezuela and Qatar to freeze output at record January levels, rather than make cuts, left a bad taste in the mouths of traders, sending both main contracts into reverse.
"The market was expecting a little more -- cuts to production, for example, and it s undeniable that investors aren t fully satisfied with the pledge," said Chihiro Ohta, general manager of investment information at SMBC Nikko Securities.
Eyes are now on historic rivals Iran and Iraq, both OPEC members, to see if they can reach an agreement that would help ease a crippling global supply glut.
"Iraq and Iran are the two countries that are going to contribute to growth from the OPEC nations this year," Richard Gorry, managing director at JBC Energy Asia in Singapore, told Bloomberg Television.
"Getting an agreement from these is going to be very difficult, particularly in the case of Iran," he added, referring to the fact the country has only just started exporting after Western nuclear-linked sanctions were lifted.
In early trade, US benchmark West Texas Intermediate was up 1.1 percent and Brent 1.6 percent.
But after a recent rally, energy firms were in retreat. Hong Kong-listed CNOOC fell two percent and PetroChina was more than two percent off, while in Sydney Woodside Petroleum lost 6.5 percent and Rio Tinto was one percent lower.
- Most markets up -
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On share markets Tokyo s Nikkei was slightly lower by the break after enjoying a more than seven percent surge in the previous two sessions, with a slightly stronger yen acting as a millstone.
However, mobile carrier SoftBank soared for the third day after it said Monday it would buy back about 14 percent of its shares for more than $4.0 billion over the course of a year.
SoftBank, a market heavyweight, gained 8.5 percent. It has surged more than 30 percent since the buyback announcement, having tanked 28 percent since the start of the year as part of a global stocks rout.
In other markets Hong Kong was up 0.9 percent and Shanghai added 0.4 percent on hopes for fresh measures to kickstart the world s number-two economy.
Sydney, Seoul, Wellington and Taipei were also comfortably higher.
Buying confidence was supported by a surge on Wall Street as US dealers returned from a long weekend. The Dow closed up 1.4 percent Tuesday, while the S&P 500 rose 1.7 percent and the Nasdaq added 2.3 percent.
The Federal Reserve will later in the day release minutes of its January policy meeting, which experts will pore over for clues about the bank s thinking on monetary policy.
Having projected four quarter-point interest rate hikes this year, after December s first rise in more than nine years, there are expectations it will hold off any more in light of the global economy s recent travails.
