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|29 January, 2019

Tuesday outlook: Oil prices edge higher as U.S. imposes sanctions on Venezuelan oil firm

Teaser: Oil prices rise on curb in Venezuelan exports to the United States. Asian shares track a drop on Wall Street. More commentary on Middle East markets, currencies and precious metals.

Image used for illustrative purpose. The BP West Coast Products LLC Carson oil refinery on August 7, 2006 in Carson, California.

Image used for illustrative purpose. The BP West Coast Products LLC Carson oil refinery on August 7, 2006 in Carson, California.

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  • Oil prices rise on Venezuelan sanctions
  • Asian shares track Wall Street lower on Huawei charges
  • Most markets in the Middle East rose on Monday
  • Dollar remains unchanged, gold prices rise

Oil prices

Oil prices edged higher early on Tuesday as the United States imposed sanctions on Venezuelan state-owned oil firm PDVSA, curbing its exports to the U.S.

U.S. West Texas Intermediate (WTI) crude futures were at $52.12 per barrel at 0351 GMT, up 13 cents, or 0.3 percent, from their last settlement.

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International Brent crude oil futures were at $60.05 per barrel, up 12 cents, or 0.2 percent.

“As a result of today’s action, all property and interests in property of PDVSA subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them,” the U.S. Treasury said late on Monday, according to a Reuters report.

“Persons operating in the oil sector of the Venezuelan economy may be subject to sanctions,” it added.

Global markets

Asian shares dropped in early trading on Tuesday after the U.S. Justice Department unsealed indictment charges against China’s top telecom equipment maker, Huawei.

Japan’s Nikkei slid about 1 percent, Chinese shares opened in the red too, with the blue-chip index down 0.2 percent.

Overnight on Wall Street, the Dow and S&P 500 each closed down 0.8 percent and the Nasdaq was off more than 1 percent.

Middle East markets

Most stock markets in the region rose on Monday.

Dubai’s index gained 1.2 percent as Dubai Islamic Bank added 2.5 percent while Emaar Properties was up 1.7 percent and Damac Properties closed 5.8 percent higher.

The Abu Dhabi index added 0.6 percent, helped by First Abu Dhabi, United Arab Emirates' biggest lender, which increased 1.1 percent.

Saudi Arabia's index rose 1.4 percent to its highest since August 2015, with Al Rajhi Bank adding 2.2 percent and Riyad Bank increasing 4.2 percent.

Qatar's blue-chip index increased 0.3 percent as real estate firm, United Development Company was up 3.2 percent.

The Egyptian blue-chip index was up 0.7 percent, helped by a 17.5 percent jump in Global Telecom Holding.

Kuwait’s premier market index dropped 0.6 percent while Oman’s index edged 0.2 percent lower and Bahrain’s dropped 0.8 percent.

Currencies

The dollar was mainly unchanged early on Tuesday.

The dollar index, which measures the greenback against a basket of six major currencies, was last at 95.758.

Precious metals

Gold prices rose on Tuesday as investors moved from risky assets to safe havens.

Spot gold rose to its highest since June 14, 2018 at $1,304.53 in morning trade and was firm at $1,303.62 per ounce by 0319 GMT. U.S. gold futures were also steady at $1,302.70 per ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)

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