Oil rally lifts energy firms, dollar dips on risk confidence

Oil prices on Wednesday extended a rally on hopes a global supply glut could be easing, boosting Asian energy shares, while a broadly confident outlook saw emerging currencies surge against the dollar.

Market heavyweight Samsung Electronics dragged South Korean shares higher as it soared after flagging a massive increase in operating profit for July-September.

Global markets have steamed ahead since the release Friday of underwhelming US jobs data that lowered expectations the Federal Reserve will tighten monetary policy before the end of the year.

The greenback also retreated against the yen after the Bank of Japan decided against widening its stimulus programme, saying the economy was moderately growing despite a string of weak recent data.

On Tuesday US crude benchmark West Texas Intermediate jumped 4.9 percent while Brent North Sea crude soared 5.4 percent after the US Department of Energy forecast a drop in average production in 2016 and an increase in global demand this year.

"There's a bit of optimism creeping into the market," Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, told Bloomberg News.

"Prices have found a base, $45 has been a very solid level and it will be very hard to break back down below that."

On Wednesday afternoon WTI was up a further 2.0 percent and Brent added 1.3 percent.

Among Asian energy players, Hong Kong-listed shares of China's CNOOC surged 13.74 percent and PetroChina rallied more than nine percent. In Sydney, Santos soared almost 12 percent while Origin was up 9.7 percent.

Regional stock markets were also higher, with Hong Kong closing 3.13 percent up and Singapore adding 2.22 percent in the afternoon. Sydney closed 0.59 percent stronger and Seoul advanced 0.76 percent by the close.

- Samsung surge -

Tokyo recovered from morning losses to end 0.75 percent higher despite the central bank's decision to hold fire on expanding its asset-buying scheme in the face of sputtering growth.

Later in the day BoJ chief Haruhiko Kuroda gave little away in whether the bank would move at its next meeting later this month, saying: "We will examine both upside and downside risks to economic activity and prices, and if necessary we will take additional measures without hesitating."

He also insisted inflation was on a rising trend, although he admitted "wholesale prices are declining to some extent" due partly to falls in oil prices.

Naoki Fujiwara, chief fund manager at Shinkin Asset Management in Tokyo, said: "Expectations for further easing are deeply entrenched, leading us to a sixth consecutive day of gains."

With no more easing measures expected until at least the end of October the yen rose against the dollar. In afternoon exchanges the greenback was at 120.02 yen compared with 120.28 yen in New York Tuesday.

A generally confident outlook and waning expectations the US will hike rates soon helped higher-yielding, or riskier, currencies advance against the dollar again Wednesday.

The Indonesian rupiah, which has been hammered by the greenback in the past year, surged 3.4 percent although it is still around 17-year lows, while resources-dependent Malaysia's ringgit added three percent thanks to the uptick in oil prices.

The Australian dollar was up 0.65 percent, the Thai baht was 0.95 percent higher, and the Taiwan dollar was 1.3 percent higher.

In Seoul, Samsung piled on 8.7 percent after it said it expected to see an 80 percent jump in third-quarter operating profit.

Analysts put the blockbuster figure down to a weaker Korean won and improved sales of televisions and chips as it moves away from its reliance on smartphones owing to stiff competition from Apple and Chinese rivals.

"With sluggish sales of Galaxy S6... the (semiconductor and TV) businesses were a major factor behind the surprise earnings," said Lee Seung-Woo, analyst at IBK Securities.