“Market participants are looking ahead to the weekly IEA oil inventory data for the U.S., which is expected to show yet another drawdown,” Abhishek Kumar, head of analytics at Interfax Energy in London told Reuters.
“Nevertheless, oil production in the Gulf of Mexico returning to normal following Hurricane Barry will limit price gains,” he added.
Asian shares were subdued on Wednesday as investors awaited earning reports from the United States.
On Tuesday, U.S. President threatened to impose tariffs on another $325 billion of Chinese goods, adding to market anxiety.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 0.3 percent, Japan’s Nikkei was lower by 0.5 percent and South Korea dropped by 1 percent.
Middle East markets
Most Gulf stock markets were up on Tuesday, in line with global markets that saw gains from expectations of interest rate cut by the U.S. Fed.
The Saudi stock exchange saw gains at more than two month-high with the main bourse adding 0.4percent. For the second quarter of the year, the Saudi financial sector is expected to grow by 7.6 percent as per EFG Hermes forecasts.
In the UAE, the Dubai index gained 0.3 percent supported by a 5.2 percent rise in Amlak Finance that is reportedly close to restructuring loans worth $1.2 billion with lenders.
Meanwhile, Abu Dhabi index hit a two-month high rising by 0.7 percent as First Abu Dhabi Bank was up by 1.2 percent.
"Investor sentiment does seem to have improved in local markets, partly driven by the global lead - heightened expectations of a rate cut by the Fed this month," Vrajesh Bhandari, senior portfolio manager, Al Mal Capital told Reuters.
In Kuwait, the index gained 0.5 percent, and it is on track for the best month since March following MSCI's decision to upgrade it to its main emerging-market index in 2020.
In currency markets, the dollar gained from strong retail data from the U.S. as well as from the pound’s plunge on Brexit.
The sterling dropped 0.9% overnight to 27-month lows amid fears the UK could exit the European Union with no trade deal.
The pound ended at $1.2412 after reaching March peaks of $1.3383.
The dollar rose 0.5 percent overnight and traded at 97.351 on a basket of currencies. The euro ended at $1.1210, after dropping 0.4 percent on Tuesday.
The dollar’s gains tarnished gold a little, with the precious metal
Gold eased to $1,405.45 per ounce on the back of gains on U.S. dollar, after reaching a high above $1,418 on Tuesday.
(Writing by Nada Al Rifai; Editing by Mily Chakrabarty)
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