HONG KONG — Oil prices held around four-year highs Tuesday after another blistering rally, supporting energy firms, but most markets were in retreat as traders brushed off a positive lead from Wall Street and the US-Mexico-Canada trade deal.
Crude has motored in recent weeks on concerns about supplies after sanctions are imposed on Iran next month, while OPEC's decision not to ramp up output, upheaval in Venezuela, a strong dollar and a drop in oil rigs have also pushed prices higher.
Both main contracts jumped almost three percent Monday and now some observers and key players in the sector are eyeing $100 a barrel.
"Right now, we're just in a bull market for oil because of the prospects of a very tight market later on in the year," John Kilduff, founding partner at New York-based hedge fund Again Capital LLC, told Bloomberg News.
Hong Kong-listed PetroChina piled on more than two percent, while CNOOC was 1.4 percent higher and Inpex surged 1.3 percent in Tokyo.
"The market's very keen to figure out the size of the impact from the Iranian supply disruptions and whether Saudi Arabia and Russia are able to make up for the losses," Kim Kwangrae, a commodities analyst at Samsung Futures, said.
"At the same time, the US-Mexico-Canada Agreement is also improving the overall sentiment on oil."
New York traders sent the Dow and S&P 500 higher after the United States-Mexico-Canada Agreement (USMCA) was announced Sunday to replace the North American Free Trade Agreement.
The deal drew an end to months of uncertainty after Donald Trump had threatened to tear up the decades-old NAFTA.
However, Asia was unable to follow suit.
Hong Kong reopened after a long weekend to fall more than one percent, with data indicating a drop in Chinese manufacturing activity weighing on sentiment. Sydney shed 0.8 percent, Singapore fell 0.3 percent and Seoul was off 0.5 percent.
Wellington, Taipei and Manila were also well down.
Tokyo was barely moved by the break after the Nikkei on Monday saw its highest close in 27 years, thanks to the yen being at its weakest since November.
Markets in China were closed for a holiday.