Asian markets closed mixed, with the weaker U.S. dollar pushing Japan into the red but with Hong Kong and China firmly in the green. Australia finished nearly 1 percent up.
The dollar fell to new lows after a senior Chinese political figure said China should balance its foreign exchange reserves so that strong currencies such as the euro offset weakening currencies such as the dollar.
U.S. crude hit a life high of $98 a barrel in Asian trade, adding to a $3 rally overnight after the U.S. government predicted that robust demand and extra OPEC production may fail to stem the slide in inventories.
Betting that these record high oil prices will lift profits for energy firms, investors snapped up oil and gas producer Woodside Petroleum, Chinese oil developers Sinopec and CNOOC and South Korea's SK Energy driving these stocks higher.
The Nikkei 225 Average hit a 7-week closing low for the third straight day after morning gains were undermined by a surging yen, prompting selling of exporters such as Canon that then led to wider sales. Shares in auto companies also slid, though they had helped buoy the market earlier, ahead of Toyota Motor's earnings announcement just after the close.
South Korea's KOSPI ended 0.5 percent lower
after just missing a record high, as stocks sensitive to fuel costs such as Korean Air tumbled on record oil prices, but improving outlooks buoyed techs such as LG Electronics. SK Telecom jumped over 4 percent on market talk South Korea's top mobile phone operator might be bidding for broadband operator hanarotelecom, spreading its reach.
Australian shares finished nearly 1 percent higher, gaining for a second straight day, as
record high oil prices and strong metals drove resource firms such as BHP Billiton and Newcrest Mining up. But conglomerate CSR dropped almost 4 percent after it reported a weaker-than-expected first-half profit and ruled out a break-up of the group in the near term. The Reserve Bank of Australia raised its key cash rate to an 11-year peak of 6.75 percent to restrain inflation -- the first rate rise during an election campaign -- though dealers said the widely expected move had little market impact.
Singapore's Straits Times Index ended nearly flat after spending the morning session in positive territory. But shares of Chinese furniture maker Cacola Furniture International, which raised S$38 million (US$26 million) in its Singapore initial share offer, was up as much as 78 percent above their issue price of S$0.32.
Hong Kong stocks closed nearly 1 percent higher as property shares rallied further on recent rate cuts and asset inflation expectations, while record crude prices pushed up PetroChina and other oil issues. Alibaba.com traded heavily, dropping 10 percent, a day after shares in China's top e-commerce firm about tripled in their spectacular debut. Lenovo Computer Group was also active, with the PC maker sliding as much as 6.1 percent after a group of private equity firms sold its shares at HK$8.16 each, a 6.5 percent discount to the stock's last closing price.
Most Chinese shares fell as supply and policy worries continued to weigh on the market, though the Shanghai Composite Index rose as some blue chips rebounded from Tuesday's steep falls.