Oil sinks further, dollar hit by wage data

Hong Kong - Oil prices continued their slide on Monday, while most Asian stock markets also retreated after a sell-off in New York at the end of last week that came in reaction to data showing weak US wage growth.

The news on wages, which overshadowed another forecast-beating rise in jobs creation, pushed the dollar down against the euro and yen as it complicates the Federal Reserve's plans to hike interest rates.

Seoul fell 0.18%, Sydney eased 0.79% and Shanghai sank 0.46% but Hong Kong edged up 0.20%.

Tokyo was closed for a public holiday.

Weak demand and a supply glut sent crude to new five-and-a-half-year lows, with analysts tipping further losses this week.

The US benchmark, West Texas Intermediate for February delivery, lost 81 cents to $47.55 a barrel, while Brent was 90c to $49.21.

Singapore's United Overseas Bank said in a commentary: "Oil prices continued to tumble and headed for a seventh straight weekly loss as key producers show no sign of cutting output in the face of a supply glut."

Crude prices have lost more than half their value since the middle of last year, with weakness in key markets China and the eurozone adding to the supply and demand crisis.

Wall Street provided a negative lead for stock markets after figures showed US wages grew 1.7% year-on-year in December, barely keeping up with inflation and indicating consumer spending power remained low.

The Dow slipped 0.95%, the S&P 500 fell 0.84% and the Nasdaq lost 0.68%.

Traders latched on to the data, ignoring the fact that unemployment fell to 5.6%, the lowest level in six-and-a-half years, while 252 000 new posts were created in December to cap the best year for job creation since 1999.

Analysts took the report as allowing the Fed to hold off hiking interest rates too soon, denting speculation of an increase in April and making the dollar less attractive to investors.

In early Asian trade it bought ¥118.28 compared with ¥118.46 on Friday in New York

The euro fetched $1.1863 against $1.1842, while it was also at ¥140.33 compared with ¥140.29.

Gold cost $1 226.84 an ounce, compared with $1 211.42 on Friday.