HONG KONG — Oil prices resumed their retreat in Asia Tuesday while Hong Kong stocks succumbed to their longest run of losses for more than 30 years, ahead of the U.S. Federal Reserve’s hotly anticipated meeting. After plunging around 12 percent last week, crude closed slightly up Monday. But with global demand still weak and a continuing supply glut, the commodity could not build up any price momentum in Asia. Energy firms, which have been hammered for months by the sinking oil price — down more than 60 percent since June 2014 — enjoyed early gains but late selling saw most end the day further in the red. The decision by the OPEC oil exporters’ group earlier this month not to cap production levels continues to depress prices. BMI research said in a report that more downside pressure is expected in the coming months. “Oil prices will remain anchored by oversupply,” it said, predicting that the global surplus “will only narrow significantly post-2018.” Woodside Petroleum in Sydney edged down 0.8 percent and Santos shed 1.8 percent, while Inpex in Tokyo was more than 1 percent off. However, CNOOC and PetroChina rose in Hong Kong even though the Hang Seng Index suffered its ninth straight retreat — the longest losing streak since 1984, according to Bloomberg News. Dealers are turning their attention to Washington, where the Fed later Tuesday begins a two-day policy meeting expected to end with its first interest rate rise for nine years. Analysts say the increase has been on the cards for several weeks and the real focus is on subsequent steps. US Dollar Struggles “Investors are focusing on the Fed,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities.
“They want to see what the Fed will announce on the target interest rate at the end of 2016. There’s market consensus that rates will rise this week, but it is unclear what happens after that.” The U.S. dollar has been subdued in recent sessions, with the euro edging up despite the expected U.S. rate rise and speculation the European Central Bank will go the other way and loosen monetary policy to kick-start the eurozone economy. Asian stock markets remained largely shaky despite a positive lead from Wall Street, where all three main indexes ended in positive territory Monday. Tokyo was the main loser as the stronger yen hit exporters, with the Nikkei tumbling 1.7 percent. Hong Kong gave up early gains to a late sell-off and ended down 0.2 percent, Sydney fell 0.4 percent and Shanghai edged 0.3 percent lower.
There were also losses in Singapore, Manila and Kuala Lumpur. However, Seoul added 0.3 percent while Wellington also eked out gains. In Europe, London surged 1.3 percent, Frankfurt rose 1.0 percent and Paris gained 1.1 percent in early trading.