(MENAFN- AFP) Energy firms in Asia rose Wednesday on the back of a rush into oil after data indicated a jump in US demand, but regional markets struggled to maintain early upward momentum before a crucial Federal Reserve policy meeting later in the day.
Comments from new Fed boss Jerome Powell will be pored over in hopes of fresh guidance about its interest rate plans for the rest of the year.
Fears that the US central bank will embark on a sharper pace of rises than previously expected have rattled markets worldwide since the start of February, as traders contemplate the end of a decade of cheap cash that has fired an equities rally.
Stephen Innes, head of Asia-Pacific trading at OANDA, said there would likely be some changes to the bank's previous statements.
"Since the December meeting, inflation has shown signs of coming to life, although the latest round of data would challenge that view," he added.
"But, more significantly, Fed speak has turned marginally more hawkish of late, suggesting we should expect some upgrade to the statement, at the minimum."
Market uncertainty has also been fanned by Donald Trump's controversial tariffs on metals imports and threats of more, which have sparked talk of a global trade war, while the Facebook data breach is also keeping trading cautious.
However, the energy market provided some optimism in Asia on Wednesday after the American Petroleum Institute announced a huge draw in US stockpiles last week, confounding expectations of another rise.
- US-Saudi meeting -
The news provided some hope that demand in the world's top economy is picking up. Official data will be released later Wednesday.
WTI and Brent each jumped more than two percent Tuesday and extended gains on Wednesday.
Also Tuesday a committee working for the Russia-OPEC group that has capped output said global supplies would balance with demand by the end of September, sooner than previous forecasts.
Analysts added there was also likely support for prices from uncertainty about the Iran nuclear deal, which could spark fresh geopolitical woes. The speculation comes as Saudi Arabian Crown Prince Mohammed bin Salman was in the US.
The prince ramped up pressure on regional arch-rival and fellow crude producer Iran, telling CBS's "60 minutes" the kingdom would follow suit if Iran developed nuclear weapons.
"Iran and the Saudis have faced off a bit more directly. That's ratcheted up a level with the Crown Prince in Washington," said Greg McKenna, chief market strategist at Axitrader.
Energy firms across Asia rose, with CNOOC, PetroChina and Sinopec in Hong Kong all up but by much less than earlier. Sydney-listed Santos was more than one percent higher and Woodside Petroleum gained 0.4 percent.
Those gains were not enough, however, to keep all broader markets higher.
Hong Kong finished down 0.4 percent, having been up more than one percent, while Shanghai ended 0.3 percent lower and Seoul was marginally down.
But Sydney rose 0.2 percent, Wellington jumped more than one percent and Singapore put on 0.1 percent, while Jakarta and Bangkok were also up.
Tokyo was closed for a public holiday.
While the overall market in Sydney gained, gaming firm Crown Resorts fell more than one percent on news that tycoon James Packer had quit as director as he battles "mental health issues".
London and Paris each opened flat, while Frankfurt added 0.3 percent.
- Key figures around 0820 GMT -
Hong Kong - Hang Seng: DOWN 0.4 percent at 31,414.52 (close)
Tokyo - Nikkei 225: Closed for public holiday
London - FTSE 100: FLAT at 7,060.60
Euro/dollar: UP at $1.2278 from $1.2242 at 2100 GMT
Pound/dollar: UP at $1.4023 from $1.3996
Dollar/yen: DOWN at 106.38 yen from 106.54 yen
Oil - West Texas Intermediate: UP 11 cents at $63.65 per barrel (new contract)
Oil - Brent North Sea: UP 11 cents at $67.53 per barrel
New York - Dow: UP 0.5 percent at 24,727.27 (close)
-- Bloomberg News contributed to this report --
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