(MENAFN- AFP) Asian energy firms extended a global sell-off Wednesday, dragging regional equity markets, as oil prices continued to tumble on the back of warnings of slowing demand and rising stockpiles.
Both main contracts were down more than one percent as investors were spooked after the International Energy Agency (IEA) cut its forecast for crude consumption, saying recovering prices and a mild early winter were weighing on purchases.
The Paris-based group said the sector would likely be oversupplied in the last three months of the year and 2018, while the US industry body announced a huge jump in stockpiles last week.
The news comes after recent gains in crude fuelled by a production cut by the OPEC cartel and a brewing crisis in the Middle East between Saudi Arabia and Iran.
"Global demand growth, with the extension of the production cut, were the two primary factors behind the significant increase we've seen, particularly in the last six months," Gene McGillian, a market research manager at US-based Tradition Energy, told Bloomberg News.
McGillian added that the forecast is "taking a little bit of the bloom off the rose".
The losses in oil prices -- which follow Tuesday's 1.9 percent fall in WTI and 1.5 percent drop in Brent -- battered Asian energy firms.
Among the biggest losers Tokyo-listed Inpex dived four percent, PetroChina in Hong Kong plunged 3.3 percent and Woodside Petroleum sank 2.4 percent in Sydney.
- US tax worries -
The sell-off filtered through to wider stock markets, which have been on a broad decline since hitting multi-year highs last week.
Tokyo was 0.9 percent down at the break, with a stronger yen and a slight slowdown in Japanese economic growth adding to the waning optimism. The Nikkei had ended at a quarter-century high last Thursday.
Hong Kong lost 0.7 percent, Shanghai shed 0.8 percent, Sydney was 0.3 percent off and Singapore gave up 0.6 percent. Seoul eased 0.3 percent, Manila dropped one percent and Taipei was 0.6 percent lower.
The retreat followed fresh losses on Wall Street, where all three main indexes have succumbed to profit-taking after last week hitting record highs.
US dealers are also concerned about Donald Trump's tax-cuts as Republican lawmakers struggle to agree on a unified plan, which has led to speculation the legislation could fail in a similar way to the healthcare overhaul.
On currency markets the euro held most of its gains after surging on Tuesday in response to better-than-expected German growth figures. The single currency briefly broke above $1.18 in early trade before easing back slightly.
The pound, however, remains weak on uncertainty about the political future of Britain's Prime Minister Theresa May as her government struggles along with Brexit talks.
- Key figures around 0330 GMT -
Tokyo - Nikkei 225: DOWN 0.9 percent at 22,171.08 (break)
Hong Kong - Hang Seng: DOWN 0.7 percent at 28,959.14
Shanghai - Composite: DOWN 0.8 percent at 3,402.94
Euro/dollar: DOWN at $1.1793 from $1.1792 at 2145 GMT
Dollar/yen: DOWN at 113.14 yen from 113.43 yen
Pound/dollar: DOWN at $1.3130 from $1.3166
Oil - West Texas Intermediate: DOWN 59 cents at $55.11 per barrel
Oil - Brent North Sea: DOWN 73 cents at $61.48
New York - DOW: DOWN 0.1 percent at 23,409.47 (close)
London - FTSE 100: FLAT at 7,414.42 (close)
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