Oil prices fell to a four-month low on Wednesday on warm winter weather and bulging inventories in the United States, while firm export stocks supported Asian stock markets.
Platinum hit a fresh quarter-century peak on expectations of strong demand, and the dollar recovered after dropping back from Tuesday's highs in the aftermath of eagerly awaited but unsurprising economic policy comments from prospective Fed chairman Ben Banana.
Tokyo's benchmark Nikkei average ended the morning session flat, with retailers weak, but export stocks benefiting from dollar firmness. Hong Kong's Hang Seng edged up 0.2 percent, and MSc's index of non-Japan Asian shares was up 0.4 percent.
After a decline of more than 1 percent on Tuesday, Nymex crude for December delivery was down 1 cent at $56.97 a barrel in Asian trade after sliding to $56.85, its the lowest since July 21. "This is a typical pattern of weakness," said John Brady, an energy broker at ABN Amro in New York. "Stocks have been elevated and we don't have cold snap that helps heating oil demand."
Crude prices are down nearly 20 percent since hitting a peak above $70 a barrel in late August, as high prices cooled demand for gasoline from drivers and balmy weather curtailed heating oil consumption.
Weekly US inventories data is due later on Wednesday.
Stocks are already nearly 13 percent above year-ago levels, and analysts believe they will show a rise of 1.8 million barrels last week due to strong imports.
The dollar was steady near the two-year highs it reached on Tuesday after testimony by Ben Bernanke, the nominee for Federal Reserve chairman, and supported by stronger-than-expected consumer spending data.
Banana's first round of testimony to US legislators reinforced the market's view that the Fed would keep raising rates, but speculators and investors rushed to cash in on the dollar's big gains of late. "It was profit-taking.
There was no real fundamental reason for the dollar coming off," said the chief trader at a European investment bank in Tokyo. "Banana wasn't a surprise." Banana vowed to fight for US price stability and said he would carry on with the policies of Alan Greenspan, the Fed chief for nearly two decades who is set to retire on January 31. October US retail sales data showed retail sales dipped a smaller-than-expected 0.1 percent in October.
The US currency hovered around 118.95 yen that was little changed from late New York trade on Tuesday, when the dollar climbed to 119.43 yen, the highest since August 2003.
The euro was also little changed at $1.1725 a day after rebounding from a low of $1.1640, the weakest since November 2003, as the German ZEW institute showed investor sentiment in the euro zone's biggest economy unexpectedly deteriorated in a November poll.
Singapore's Straits Times climbed 0.5 percent, and Taiwan's benchmark index rose 0.4 percent, led higher by strong technology issues. Australia's S&P ASX 200 was up 0.35 percent. Heavyweight telecom stocks Telstra recovered 0.75 percent after on Tuesday's 6.9 percent dive on investor disappointment at its business revitalisation plan.
South Korea's KOSPI was up 0.3 percent, with export stocks like Hyundai Motor, up 0.6 percent, underpinned by strong US data. US stocks closed lower. The Dow Jones industrial average fell 0.1 percent and the Nasdaq Composite Index eased 0.65 percent.
Platinum rose to $980, up from around $970 in late New York trade and its highest since 1980. Precious metals refiner Johnson Matthey said the market was set to remain in deficit for the seventh year in a row in 2005 and prices could rise up to $1,030 an ounce during the next six months.