Asia energy firms under pressure on oil drop

Energy firms struggled again in Asian trade Thursday after fresh plunge in oil prices as supply glut fears returned, while regional equities saw a mixed response to the previous day's sell-off.

Both main crude contracts dived more than two percent Wednesday despite a bigger-than-forecast drop in US inventories, with analysts suggesting OPEC and Russia should announce further output cuts.

"The fact that oil is now falling on a bullish inventory number must be a red light for producers and traders alike," said Jeffrey Halley, senior market analyst at OANDA.

"OPEC/non-OPEC must now confront the oil elephant in the room, increasing the overall production cut from its present levels. The other choice will be to let the market set the price, which may mean oil drops to a level that even the newly slimline US shale industry struggles to break even at."

However, the crisis comes at a time of heightened tensions between OPEC kingpin Saudi Arabia and fellow members Iran and Qatar, leaving little chance of cooperation.

Crude edged lower in volatile Asian trade and is down around 25 percent from its January highs, sitting at levels not seen since August.

That has dug into energy firms for another day. In Hong Kong, Sinopec and PetroChina each slipped 0.4 percent. Inpex tumbled 1.5 percent in Tokyo, although Sydney-listed Woodside Petroleum edged up 0.1 percent on bargain-buying.

Broader markets began the day on a high but struggled towards the end of trade. Hong Kong finished 0.1 percent down, Sydney put on 0.7 percent while Singapore gained 0.4 percent and Seoul 0.5 percent.

Shanghai ended 0.3 percent down after Wednesday's rally that was fuelled by MSCI finally approving Chinese mainland-listed or A-shares for inclusion in its emerging markets index.

Tokyo was 0.1 percent lower, with Takata the standout loser. The airbag maker crashed 55 percent Thursday on fears it is headed for bankruptcy and plans to sell its assets to a US company.

The Tokyo-based company at the centre of the global auto industry's biggest-ever safety recall has tumbled for four straight days and its stock is now worth less than a quarter of its value just a week ago.

In currency trade the dollar was unable to break out against the pound and yen, despite Federal Reserve indications it will hike interest rates again this year.

In early European trade London slipped 0.4 percent, Paris lost 0.3 percent and Paris was 0.1 percent off.

- Key figures around 0820 GMT -

Tokyo - Nikkei 225: DOWN 0.1 percent at 20,110.51 (close)

Hong Kong - Hang Seng: DOWN 0.1 percent at 25,674.53 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,147.45 (close)

London - FTSE 100: DOWN 0.4 percent at 7,417.78

Euro/dollar: UP at $1.1165 from $1.1163 at 2030 GMT

Pound/dollar: UP at $1.2666 from $1.2664

Dollar/yen: DOWN at 111.02 yen from 111.42 yen

Oil - West Texas Intermediate: DOWN nine cents at $42.44 per barrel

Oil - Brent North Sea: DOWN nine cents at $44.73

New York - Dow: DOWN 0.3 percent at 21,410.03 (close)