Hong Kong: Oil prices resumed their downward spiral in Asia on Thursday after rallying in the previous session on bargain-buying, while the dollar recovered after plunging in New York in reaction to disappointing US retail sales data.
Crude enjoyed a rare five percent rally on Wednesday after plunging close to six-year lows, with analysts saying a pick-up had been expected after the commodity had crashed more than 50 percent since June.
"Just so much of the bearish news has been priced in, it`s just overdue for a correction," said John Kilduff, founding partner at hedge fund Again Capital.
However, the two main contracts retreated again Thursday as dealers digested news that US stockpiles had risen, adding to long-running concerns about a supply glut and weak demand.
US benchmark West Texas Intermediate for February delivery lost 32 cents to $48.16 and Brent fell 29 cents to $48.40.
In share trading Hong Kong added 0.28 percent and Shanghai gained 0.25 percent, with energy firms boosted by the oil rebound. However, Sydney lost 0.62 percent, while Seoul was 0.19 percent lower.
Tokyo added 1.46 percent by the break as the yen weakened against the dollar.
"Given the return in oil prices and the deep sell-off (Wednesday) in Japanese stocks, the conditions could be there for a rebound," Mitsushige Akino, an executive officer at Ichiyoshi Asset Management Co. in Tokyo, told Bloomberg News.
"The risk-off sentiment pushed the dollar-yen pair to as low as 116, but that was probably going too far in the short term."
Regional traders took their lead from Wall Street, where the losses in crude mixed with figures showing a surprise 0.9 percent fall in US retail sales in December.
The Dow fell 1.06 percent, the S&P 500 shed 0.58 percent and the Nasdaq lost 0.48 percent -- marking a fourth-straight day of losses for US markets.
Adding to the downbeat sentiment was news that the World Bank had cut its growth forecast for the global economy, saying a US recovery was not enough to drag up other economies.
There was some good news, however, with the Federal Reserve saying in its Beige Book report that the US economy kept up "modest" or "moderate" growth in recent weeks.
On currency markets the dollar climbed after being hammered Wednesday in response to the poor retail sales figures, which could force the Fed to rethink its plan to hike interest rates by the middle of the year.
The greenback bought 117.71 yen early Thursday, up from 117.39 late in New York, where at one point it hit a low of 116.08.
The euro bought $1.1774 and 138.62 yen Thursday against $1.1782 and 138.30 yen in US trade.
Gold was $1,230.33 an ounce, compared with $1,238.84 on Tuesday.
