SINGAPORE - Oil prices fell further on Wednesday as OPEC considered raising production, pushing up Asian stocks, although investors remained on edge because of the turmoil in the Middle East. The euro fell as worries about European sovereign debt problems intensified following Moody's credit rating downgrade for Greece on Monday. European shares were set to fall on Wednesday after gains in the previous session, with a Portuguese bond auction likely to be in focus as jitters about the euro zone sovereign debt crisis resurface. Financial spreadbetters expected Britain's FTSE 100 to open down 14 to 20 points, or as much as 0.3 per cent, Germany's DAX to open 4 to 8 points lower or as much as 0.1 per cent, and France's CAC-40 to open down 6 to 8 points or as much as 0.2 per cent. Benchmark US crude futures dipped to $104.25 a barrel, easing further from a 2-1/2 year high hit on Monday, after Kuwait's oil minister said the Organisation of the Petroleum Exporting Countries (OPEC) was considering boosting supply to offset disruptions in Libya, where government forces are trying to quash a popular uprising. Brent crude declined for a third day to stand at $112.34 a barrel at 0710 GMT, more than $7 below a 2-1/2 year high of almost $120 reached on Feb. 24. An official oil output increase by OPEC would signal the group's determination to cap prices, but unrest in the region has fuelled concerns about more supplies being cut off. "Oil has stopped rising for now, but it hasn't really retreated to levels that allow aggressive buying in risky assets, so investors will still be jittery," said Hiroichi Nishi, general manager at Nikko Cordial Securities. Japan's Nikkei extended gains for a second day after the pullback in oil prices lifted Wall Street but investors remained worried that high fuel prices could stunt global economic growth and erode corporate earnings. The benchmark Nikkei share average closed up 0.6 per cent, while the broader Topix gained 0.5 per cent. MSCI's index of Asia Pacific shares outside Japan edged up 0.1 per cent, led by gains in consumer durables and financials. The Korea Composite Stock Price Index (KOSPI) ended up 0.3 per cent, with banks surging ahead of the central bank's interest rate meeting on Thursday. The Bank of Korea is expected to raise rates to curb price pressures after surprising markets by leaving rates unchanged in February. The euro fell for a third straight session against the dollar, with further pressure likely as investors remained unconvinced that a European Union summit on Friday to overhaul the euro zone economies will yield any results. Concerns about Europe's debt problems have been on the rise since Moody's cut Greece's credit ratings by three notches on Monday, signalling more downgrades are on the way and adding to fears that Athens will have to restructure its debt. Failure to break through resistance above $1.40 prompted investors to trim long euro/dollar positions, sending the common currency to a low around $1.3860 overnight. With the euro on the back foot, the dollar rose against a basket of major currencies. The dollar index inched up to 76.776, pulling away from a four-month low of 76.124 set on Monday. US stocks rallied on Tuesday as crude prices retreated. The Dow Jones industrial average rose 1 percent, while the Standard & Poor's 500 Index gained 0.9 per cent. Gold steadied on Wednesday after rising to record highs as the prospects of further unrest in oil-rich Middle Eastern countries has driven investors to seek safe-haven assets. Gold eased below $1,430 an ounce, falling further from Monday's record high after the drop in oil prices eased some concerns about inflation. Spot gold was at $1,425.20 an ounce.
