Global oil prices plunged Wednesday over China demand concerns and European gas prices sank to their lowest levels since November 2021 as mild winter weather reduced needs.
Crude prices extended losses from a day earlier, diving around five percent over concern about demand in the world's biggest oil importer China as it sees a steep rise in Covid infections in the country.
"While reliable data is seemingly hard to come by, the view appears to be that there'll be significant disruption in the coming months and then a recovery from around the middle of the year which should then boost demand," said Craig Erlam, senior market analyst at OANDA trading platform.
Analysts also pointed to the mild European winter and a pick-up in the dollar that makes crude more expensive for holders of other currencies.
At around 1600 GMT, a barrel of WTI for delivery in February was down 4.9 percent at $73.15 a barrel, and the main European contract, Brent for delivery in March, was 4.9 percent lower at $78.11.
Meanwhile, wholesale natural gas prices in Europe sank to their lowest levels since November 2021 as mild winter weather reduced demand, erasing all the gains seen last year amid Russia's invasion of Ukraine.
The benchmark European contract -- Dutch TTF gas future for the coming month -- dropped 9.3 percent to 65.59 euros at around 1620 GMT, extending losses since the beginning of the week.
- Stocks rally -
European stocks built on a rally from a day earlier, with Paris and Frankfurt closing more than two percent higher following drops in government bond yields, the fall in gas prices and data showing German and French inflation slowing down.
Shares in London managed a more moderate gain, ending the day 0.4 percent higher.
Gold prices reached the highest level since June, at $1,865.12 an ounce, as traders sought safety in the traditional haven commodity.
In the US, investors were focused on the release Wednesday of the minutes from the Federal Reserve's December policy meeting.
After the meeting, the US central bank slowed its pace of interest rate hikes but signaled borrowing costs would reach higher than expected, scuttling a pre-Christmas rally across world markets.
While the Fed stressed its commitment to fighting inflation in the latest minutes, US markets shrugged off the messaging to break a brief losing streak.
The S&P 500 picked up 0.8 percent and Nasdaq Composite Index rose 0.7 percent on Wednesday.
Looking ahead, investors await key employment data this week expected to give clues on where monetary policy may be headed.
The Fed has raised interest rates seven times in the past year to try to cool demand and rein in soaring inflation, and officials have signaled they would stay the course until the job is done.
But there is a broad consensus that the Fed's tightening measures will tip the United States into recession, while the head of the International Monetary Fund has also warned a third of the global economy could contract this year.
Earlier in Asia, Hong Kong led stock market advances, while Shanghai enjoyed a second straight day of gains.
Tokyo dropped heavily on its first trading day of the year, with Japanese exporters continuing to be hit by a recovering yen.
- Key figures around 2150 GMT -
West Texas Intermediate: DOWN 5.3 percent at $72.84 per barrel
Brent North Sea crude: DOWN 5.2 percent at $77.84 per barrel
New York - Dow: UP 0.4 percent at 33,269.77 (close)
New York - S&P 500: UP 0.8 percent at 3,852.97 (close)
New York - Nasdaq: UP 0.7 percent at 10,458.76 (close)
London - FTSE 100: UP 0.4 percent at 7,585.19 points (close)
Frankfurt - DAX: UP 2.2 percent at 14,490.78 (close)
Paris - CAC 40: UP 2.3 percent at 6,776.43 (close)
EURO STOXX 50: UP 2.4 percent at 3,973.97
Tokyo - Nikkei 225: DOWN 1.5 percent at 25,716.86 (close)
Hong Kong - Hang Seng Index: UP 3.2 percent at 20,793.11 (close)
Shanghai - Composite: UP 0.2 percent at 3,123.52 (close)
Dollar/yen: UP at 132.67 yen from 130.92 yen on Tuesday
Euro/dollar: UP at $1.0611 from $1.0554
Pound/dollar: UP at $1.2055 from $1.1969
Euro/pound: DOWN at 87.94 pence from 88.15 pence