Oil prices stabilised on Wednesday but remained below more than three-year highs reached in the previous session due to a surge in fuel inventories and production in the United States.

Brent crude oil futures stood at 74.02 per barrel at 0020 GMT, up 0.2 percent from their last close, but were below the November-2014 high of $75.47 a barrel reached on Tuesday.

U.S. West Texas Intermediate (WTI) crude futures were up 0.2 percent, trading at $67.84 per barrel, but remained below the late-2014 highs of $69.56 a barrel reached earlier in April.

Asian stock markets

Asian shares were under pressure due to the rise of the U.S. bond yields above the 3 percent threshold and forecasts of higher corporate earnings. 

“We’ve seen quite a lot of companies announcing above-estimate earnings and their shares falling sharply,” Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities told Reuters.

Fujito said that major financial shares such as Goldman Sachs, Citigroup and Google parent Alphabet, which were the first major tech firm to report earnings, have followed a similar pattern. 

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7 percent while Japan's Nikkei also dropped 0.7 percent.

Middle East markets

Saudi stocks paused in early trade on Tuesday after hitting an over two-year high on the previous day as its main blue-chip stocks were seen as expensive.

The Saudi index was at 8,321 points, hovering near levels last seen in August 2015. The index has gained 15 percent this year due to foreign funds inflows and strong corporate results.

“In terms of broad valuation metrics at a 16 times price to earnings multiple, it is definitely not cheap, given earnings growth is not yet visible,” Vrajesh Bhandari, portfolio manager at Al Mal Capital in Dubai, told Reuters, speaking about Saudi Arabia.

“For instance, SABIC at 19 times is a good 15 percent more expensive than its historical average ratios. In fact, I feel most large caps are either full or have built a 5-10 percent froth over their fair market value,” he added.

Elsewhere in the Gulf, Dubai stocks were flat, supported by Emaar Properties, which was up 1.1 percent as bargain-hunting emerged in the stock after recent selling.

DAMAC Properties extended its sharp losses suffered a day earlier. It was down 2.2 percent on Tuesday. DAMAC Properties dropped 7.1 percent on Monday after the company lowered its annual cash dividend to 15 fils per share from 25 fils.

Qatar’s index was slightly lower after a flood of strong earnings helped previous recent gains.

Currencies

The dollar was steady on Wednesday, slightly below a three-month high reached after the U.S. 10-year bond yield hit 3 percent for the first time since early 2014.

The dollar index against a basket of six major currencies was marginally changed at 90.844 following a rise overnight to a top of 91.016, the highest since January 12.

“The market’s attention is firmly back on interest rate differentials and this is likely to keep supporting the dollar going forward,” Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo, told Reuters.

Precious metals

Gold prices edged higher on Wednesday as most global stock markets fell and as the U.S. dollar eased below an over three-month high hit in the previous session.

Spot gold was up 0.1 percent at $1,330.96 per ounce at 0058 GMT. Prices on Tuesday rose 0.5 percent to break a run of three continuous losing sessions. The U.S. gold futures were steady at $1,332.60 per ounce. 

And, in other news…

U.S. President Donald Trump and French President Emmanuel Macron pledged on Tuesday to seek stronger measures to curb Iran’s powers, but Trump refrained from committing to keeping a nuclear deal made with the Shi'ite-led Islamic state in 2015.

With a May 12 deadline nearing for Trump to decide on restoring U.S. economic sanctions on Tehran, Macron said he spoke to Trump about a “new deal” in which the U.S. and Europe would tackle the outstanding concerns about Iran beyond its nuclear programme.

It was unclear whether Macron made substantial progress in his efforts to prevent Trump from pulling out of the 2015 deal.

At a news conference with Macron, the U.S. president described the accord with Iran to be insane, terrible and ridiculous, according to Reuters. “This is a deal with decayed foundations,” Trump said. “It’s a bad deal. It’s falling down.”

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