Oil prices

Oil prices were trading early on Thursday near levels not seen since November 2014 as the U.S. withdrew from the Iran nuclear deal earlier in the week, and as traders adjusted to the prospects of renewed U.S. sanctions against Iran which produces around 4 percent of global oil supplies.

Brent crude futures, the international benchmark for oil prices, hit their strongest since November 2014 at $77.76 per barrel on Thursday.

U.S. West Texas Intermediate (WTI) crude futures also marked a November-2014 high, at $71.75 a barrel, and they still stood at $71.67 a barrel at 0219 GMT, up over half a dollar, or 0.7 percent, from their last settlement.

Global markets

Asian shares rose on Thursday, boosted by a surge in oil prices.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent, while Japan’s Nikkei climbed 0.1 percent. South Korea’s KOSPI rose 0.4 percent and Shanghai edged up 0.3 percent.

Overnight on Wall Street, the Dow gained 0.75 percent and the S&P 500 climbed nearly 1 percent, with the S&P energy index rallying 2 percent.

Middle East markets

Most markets in the Middle East edged down on Wednesday, as geopolitical tensions weighed on stocks.

"Stock markets in the Gulf have been weak (over the) last couple of weeks - so quite likely the event is priced in. There are other moving parts in this geopolitical equation, including the wars in Yemen and Syria, and so Iran's reaction would be keenly watched," Vrajesh Bhandari, portfolio manager at Al Mal Capital, told Reuters.

"The rise in Brent to a three-and-a-half year high has significant positive implications for oil exporting nations. If crude oil can hold these levels for a while, I think investors would begin factoring in the improving macro fundamentals," Bhandari told Reuters.

Saudi Arabia’s index fell 1.7 percent, with Al Rajhi Bank and National Commercial Bank dropping 2.3 percent and 2.2 percent respectively.

Samba Financial Group shed 2.8 percent despite recording a 6 percent rise in first-quarter net profit, meeting analyst forecasts.

Dubai’s index lost 2.0 percent, as Emaar dropped 4.9 percent, Dubai Islamic Bank lost 1.4 percent and Emirates NBD fell 2.4 percent.

Neighbouring Abu Dhabi’s index added 0.2 percent as First Abu Dhabi Bank rose 1.75 percent, while Aldar dropped 1.9 percent.

In Egypt, the main index fell 1.9 percent as 29 of its 30 stocks declined, led by Commercial International Bank which lost 2.9 percent. Global Telecom was the only gainer, closing 2.4 percent higher.

Qatar’s index lost 0.5 percent, Kuwait’s index added 0.1 percent, while Bahrain’s index lost 0.17 percent and Oman’s index dropped 0.3 percent.

Currencies

The dollar index held firm against a basket of six major currencies on Thursday. Investors will be looking at the U.S. consumer price data later in the day at 1230 GMT.

“Rises in U.S. interest rates are pushing the dollar higher,” Ayako Sera, market economist at Sumitomo Mitsui Trust Bank, told Reuters, noting that investor sentiment is stronger now than in February when worries about higher rates hit stock prices.

Precious metals

Gold prices edged back early on Thursday on a stronger dollar.

Spot gold had fallen 0.1 percent to $1,311.26 per ounce by 0053 GMT.

U.S. gold futures for June delivery slipped 0.1 percent to $1,311.40 per ounce.

In other news…

Saudi Arabia's Energy Minister Khalid al-Falih said on Wednesday that his country will work closely with major OPEC and non-OPEC producers as well as key oil consumers to lessen the impact of any supply shortages after the U.S. decision to withdraw from the Iran nuclear deal.

"Following the U.S. withdrawal from Iran (nuclear) deal, I would like to confirm our commitment to oil market stability for the benefit of producers & consumers," Falih wrote on his official twitter account.

"I am in close contact with OPEC’s presidency, Russia and the U.S., and will be contacting other producers and major consumers over the next few days to ensure oil market stability."

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(Writing by Gerard Aoun; Editing by Shane McGinley)
(gerard.aoun@thomsonreuters.com)

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