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Update: Oil heads to 6-year low, China data pares stock losses
[HONG KONG] Energy stocks took a hit in Asian trade on Tuesday as oil prices fell towards six-year lows, with warnings of further volatility ahead, but some rare upbeat Chinese trade data boosted Hong Kong and Shanghai.
Crude was dealt another blow on Tuesday when key OPEC member the United Arab Emirates said the cartel could not stop world prices plunging and called for a cut in US shale oil output.
Tokyo fell 0.64 per cent, or 110.02 points, to finish at 17,087.71, although it pared initial losses as the yen weakened in afternoon trade.
Sydney fell 0.33 per cent, or 18.01 points, to 5,404.7 and Seoul closed 0.20 per cent lower, giving back 3.81 points to 1,917.14.
However, Hong Kong added 0.79 per cent, or 189.51 points, to 24,215.97 and Shanghai rose 0.19 per cent, or 5.98 points, to 3,235.30.
Crude sank again Monday after Wall Street investment titan Goldman Sachs slashed its price outlook for the commodity, adding to anxiety about a global oversupply, weak demand and soft growth in the key Chinese and European markets.
The warning sent US shares tumbling, with the Dow down 0.54 per cent, the S&P 500 off 0.81 per cent and the Nasdaq tumbling 0.84 per cent.
"There is no escaping crude's effect on global markets," Evan Lucas, a markets strategist in Melbourne at IG Ltd., said, according to Bloomberg News. "This will see first-half volatility ramping up throughout the globe."
Prices continued their descent on Tuesday, after a mauling in the previous session.
Brent crude for February delivery fell US$1.93 to US$45.50 a barrel - around its lowest point since April 2009. On Monday it had plunged more than five per cent to end below US$50.
US benchmark West Texas Intermediate shed US$1.55 cents to US$44.52 - its weakest levels since March 2009 - a day after losing 4.7 per cent.
Selling pressure increased when UAE Energy Minister Suhail al-Mazrouei the Gulf Intelligence UAE Energy Forum in Abu Dhabi: "We cannot continue to be protecting a certain price.
"We have seen the oversupply, coming primarily from shale oil, and that needed to be corrected." Prices have been falling since June but the pace of the slide accelerated in November when the Organisation of the Petroleum Exporting Countries (Opec) decided to maintain its output.
That came as a huge supply of newly tapped oil from the US has come online.
The weakness filtered through to Asian energy companies. In Sydney BHP Billiton ended down 1.89 per cent and Woodside Petroleum fell 1.73 per cent by the close, while CNOOC in Hong Kong was 1.69 per cent lower.
Tokyo-listed Inpex shed 2.59 per cent and Showa Shell gave up 2.76 per cent.
Shanghai and Hong Kong reversed initial losses following the release of Chinese trade figures.
The General Administration of Customs said exports rose 9.7 per cent year-on-year in December, while imports fell 2.4 per cent. That resulted in an almost doubling of the country's trade surplus during the month.
The export figure exceeded the median forecast of six per cent by 40 economists in a Bloomberg survey, while the fall in imports was less severe than their prediction of a 6.2 per cent decline.
On currency markets the yen eased against the euro and dollar after a morning rally dissipated.
The dollar fetched 118.33 yen compared to 118.27 yen in New York, while the euro was at 140.05 yen against 139.98 yen.
The single currency also bought US$1.1836, compared with US$1.1834 in US trade.
Gold was US$1,241.54 an ounce, compared with US$1,222.03 on Friday.
In other markets: - Taipei rose 0.58 per cent, or 53.5 points, to 9,231.8.
Taiwan Semiconductor Manufacturing Co was 0.38 per cent higher at NT$132.5 while Hon Hai Precision Industry added 0.7 per cent to NT$86.3.
- Wellington added 0.48 per cent, or 26.80 points, to 5,636.61.
Air New Zealand was up 0.77 per cent at NZ$2.62 and Spark lifted 0.47 per cent to NZ$3.175.
- Manila closed 0.55 per cent higher, adding 40.64 points to 7,399.00.
Ayala Land rose 0.44 per cent to 34.15 pesos, Manila Electric added 0.46 per cent to 263.00 pesos and Philippine Long Distance Telephone gained 0.81 per cent to 2,970 pesos.