“The bottom line is the market has been hit by a barrage of noise that gives us less clarity than before,” Chris Weston, market strategist at Pepperstone told Reuters.
“While the most likely situation is we simply hear a lot of bravadoes that the two sides plan to work closely together and agree to find a solution that is amicable, we still need to consider if the event poses a gaping risk for markets,” he added.
“It certainly feels as though the probability is we will see traders manage exposures, refraining from adding too much additional risk just in case.”
Oil prices dropped early on Thursday, as traders cautiously await the G20 summit in Japan and a meeting of OPEC and other oil producers to decide on an extension of output cuts.
Brent crude futures were down 19 cents, or 0.3%, at $66.30 by 0256 GMT.
U.S. West Texas Intermediate (WTI) crude futures were down 19 cents, or 0.3%, at $59.19.
“I think the length of the speculative positioning might be stretched too tight ahead of G20 and of course OPEC,” Stephen Innes, managing partner at Vanguard Markets in Bangkok told Reuters.
Oil prices rose more than 2% on Wednesday to their highest in about a month, buoyed by U.S. government data showing a larger-than-expected drawdown in crude stocks as exports hit a record high and surprise drops in refined product stockpiles.
Middle East markets
Saudi Arabia’s index edged 0.4% higher with Saudi British Bank climbing 3.5% and Advanced Petrochemical rising 3.5%.
Dubai's index traded flat as gains in real estate shares were offset by losses in financial stocks. Dubai Islamic Bank shed 0.4% and DAMAC Properties added 2.8%.
The Abu Dhabi index fell 0.7% weighed down by its banking shares. First Abu Dhabi Bank slipped 0.4% and Abu Dhabi Commercial Bank dropped 1.7%.
Qatar’s index edged 0.3 percent lower, as Qatar Commercial Bank decreased 2.4% and Qatar Islamic Bank retreated 1.5%.
Egypt's blue-chip index traded 1.3% higher. El Sewedy Electric and real estate investment firm Talaat Mostafa Group Holding jumped 4.8% and 4.5%, respectively.
Kuwait’s premier market index fell 0.6 percent, Bahrain’s index edged 0.1 percent lower while Oman’s index dropped 0.3 percent.
The dollar edged lower on Thursday.
The dollar index, which measures the greenback against a basket of six major currencies, was a touch lower at 96.196.
Gold prices were mainly unchanged early on Thursday.
Spot gold was mostly unchanged at $1,408.92 per ounce as of 0107 GMT.
U.S. gold futures were 0.2% lower at $1,412.80 an ounce.
Reporting by Gerard Aoun; Editing by Mily Chakrabarty)
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