Hong Kong - Most Asia stock markets went into reverse Wednesday after a recent rally, with energy firms down and oil unable to hold early gains after an output freeze by top producers Saudi Arabia and Russia left investors disappointed.
The commodity had enjoyed a surge from Friday to early Tuesday as Moscow and Riyadh - the world's two biggest producers - prepared for talks on a rout that has seen the cost of a barrel collapse and hammered global markets.
But the conditional agreement between Saudi Arabia - the de facto leader of OPEC - Russia, Venezuela and Qatar to freeze output at record January levels, rather than make cuts, left a bad taste in the mouths of traders, sending both main contracts into reverse.
"The market was expecting a little more - cuts to production, for example, and it's undeniable that investors aren't fully satisfied with the pledge," said Chihiro Ohta, general manager of investment information at SMBC Nikko Securities.
Eyes are now on historic rivals Iran and Iraq, both key OPEC members, to see if they can reach an agreement that would help ease a crippling global supply glut.
"Iraq and Iran are the two countries that are going to contribute to growth from the OPEC nations this year," Richard Gorry, managing director at JBC Energy Asia in Singapore, told Bloomberg Television.
"Getting an agreement from these is going to be very difficult, particularly in the case of Iran," he added, referring to the fact the country has only just started exporting after Western nuclear-linked sanctions were lifted.
After rallying more than one per cent in the morning, US benchmark West Texas Intermediate was down 0.2 per cent in the afternoon and Brent was marginally higher.
Hong Kong-listed energy giant CNOOC fell four per cent and PetroChina was three per cent off, while in Sydney, Woodside Petroleum lost seven per cent and Rio Tinto was 2.5 per cent lower.
On share markets, an early rally lost steam as profit-takers moved in following some hefty gains on Monday and Tuesday.
Tokyo's Nikkei fell 1.36 after enjoying a more than seven per cent surge in the previous two sessions, with a stronger yen acting as a millstone.
However, mobile carrier SoftBank soared for the third day after it said Monday it would buy back about 14 per cent of its shares for more than $4.0 billion over the course of a year.
SoftBank, a market heavyweight, gained almost six per cent. It has surged about 30 per cent since the buyback announcement, having tanked 28 per cent since the start of the year as part of a global stocks rout.
In other markets, Hong Kong lost one per cent, Sydney ended 0.6 per cent lower and Seoul was 0.2 per cent off.
The sell-off came despite gains in New York, where the Dow closed up 1.4 per cent Tuesday, the S&P 500 rose 1.7 per cent and the Nasdaq added 2.3 per cent.
However, Shanghai added more than one per cent - on top of the 3.3 per cent gain Tuesday - on growing hopes for fresh measures to kick-start the world's number-two economy.
The rally came as reports swirled that China would make more cash available to local authorities to spend on new building projects, which reinforces speculation the government is planning fresh stimulus.
The Federal Reserve will later in the day release minutes of its January policy meeting, which experts will pore over for clues about the bank's thinking on monetary policy.
In early European trade London was up 0.3 per cent, Frankfurt added 0.4 per cent and Paris gained 0.2 per cent.