The rise in oil prices added to concerns that inflation will continue to rise.

HONG KONG (AFP) - Asian markets fell Wednesday as investors extended a run of weakness, with inflation worries and expectations of tighter central bank monetary policy the centre of attention.

Oil rose further the day after racking up big gains in reaction to news that the United States and other countries would release less from their stockpiles than expected, dealing a blow to hopes of tempering a price surge that has been key to the spike in inflation.

The announcement from Washington, which President Joe Biden said was in conjunction with China, India, Japan, South Korea and Britain had been flagged well in advance, which analysts said had been part of the reason for a dip in the crude market in recent weeks.

Brent surged more than three percent and WTI more than two percent Tuesday and the buying carried on in Asian trade, with concern now building that OPEC and other major producers will rethink their plan to slowly reopen the taps.

"The release, widely expected, is the proverbial drop in a bucket... and might just lead OPEC+ producers to scale back a bit on what they were planning to pump," said National Australia Bank’s Ray Attrill.

The rise in oil prices added to concerns that inflation -- already at multi-year highs -- will continue to rise, putting further pressure on banks to scale back the easy money policies put in place at the start of the pandemic and crucial to an 18-month market rally.

The New Zealand central bank on Wednesday lifted its rates for a second successive month.

But all eyes are on the Federal Reserve, which some observers have said could taper its bond-buying programme quicker than first flagged and hike interest rates next year.

"For quite a while now that extra liquidity hasn’t been going into the economy, it has been going more into the markets," Matt Maley, of Miller Tabak + Co, told Bloomberg Television.

"The Fed is going to start pulling back on that."

Minutes from the Fed’s November policy meeting will be pored over when they are released later in the day for an idea about officials’ thinking. Economic growth and jobless claims will also be unveiled along with a closely followed reading on consumer sentiment.

Investors are also keeping a wary eye on developments in Europe, where several countries have introduced strict containment measures to fight a resurgence of Covid, with Austria returning to a partial lockdown and some fearing Germany, the continent’s biggest economy, will follow suit.

On currency markets the Turkish lira remained wedged close to all-time lows against the dollar after Recep Tayyip Erdogan dug in on his decision to pressure the central bank last Thursday to cut interest rates, despite soaring inflation.

The president is notorious for his unorthodox belief that high interest rates cause inflation instead of helping tamp it down.