HONG KONG, Aug 16, 2022 (BSS/AFP) - Oil prices extended losses Tuesday after

weak US and Chinese data reinforced recession expectations, though equities
won support from hopes the figures will allow central banks to temper their
pace of interest rate hikes.

Stock traders tracked a Wall Street advance led by tech firms thanks to an
increase in bets that the Federal Reserve will not lift borrowing costs by 75
basis points for a third straight meeting next month.

Both main crude contracts dropped in early Asian business, having lost around
three percent the day before, as demand expectations are lowered in light of
a string of soft economic indicators in major economies.

Signs that Iran is moving towards a nuclear deal added to the downward
pressure on prices, with an agreement seen allowing the country to restart
sales into the world market.

Analysts said Tehran could provide 2.5 million barrels a day, giving a much-
needed shot in the arm to supplies, which have been hammered by sanctions on
Russia in response to its invasion of Ukraine.

Libya has also boosted production, helping prices drop to six-month lows and
wiping out the gains seen after the Ukraine war started.

But analysts warned that there might still be some way to go on an Iran
agreement owing to upcoming US elections.

"A deal with Iran would likely not be popular with US voters and so is hard
to envisage before the November mid-terms," said National Australia Bank's
Ray Attrill.

"Markets are currently prone to optimism, though, and hopes for a deal...
have added to downward pressure on oil prices."

With surging oil prices a key driver of inflation to multi-decade highs
around the world, the drop has fanned hopes that the headline figure could
begin to come down.

That has led to speculation that central bank chiefs could lift rates at a
slower pace, and then think about pivoting monetary policy to cuts as early
as next year.

The prospect of a less painful hiking campaign has sparked a rally in
equities from their June lows.

And on Tuesday, Asia built on Wall Street's upbeat performance.

Hong Kong and Shanghai rose after Beijing cut rates Monday as the world's
number two economy struggles to recover from a plunge in activity caused by
extended Covid lockdowns.

Sydney, Seoul, Taipei, Manila, Jakarta and Wellington were also up, though
Tokyo was flat and Singapore dipped.

Still, analysts warned that while equities are enjoying a bounce, the
economic outlook could keep them subdued or even fall back again.

"The risk of the markets going below the June lows is quite high," Shane
Oliver, at AMP Services, told Bloomberg Television. The weak data presage
"weaker earnings growth ahead in the US", he added.

- Key figures at around 0230 GMT -

West Texas Intermediate: DOWN 0.6 percent at $88.86 per barrel

Brent North Sea crude: DOWN 0.9 percent at $94.27 per barrel

Tokyo - Nikkei 225: FLAT at 28,861.76 (break)

Hong Kong - Hang Seng Index: UP 0.4 percent at 20,110.58

Shanghai - Composite: UP 0.4 percent at 3287.73

Euro/dollar: DOWN at $1.0164 from $1.0166 Monday

Pound/dollar: UP at $1.2057 from $1.2055

Euro/pound: UP at 84.32 pence from 84.29 pence

Dollar/yen: UP at 133.37 yen from 133.33 yen

New York - Dow: UP 0.5 percent at 33,912.44 (close)

London - FTSE 100: UP 0.1 percent at 7,509.15 (close)