—Reuters
SINGAPORE: Oil prices steadied on Thursday after their recent slide, while stocks were off to a rocky start as investors assessed the implications of deepening geopolitical tensions and mixed U.S. labour market data.
Top U.S. officials said on Wednesday the country needs to control Venezuela's oil sales and revenue indefinitely to stabilise the latter's economy, rebuild its oil sector and ensure it acts in America's interests.
That came as the U.S. seized two Venezuela-linked oil tankers in the Atlantic Ocean the same day, one sailing under Russia's flag, as part of President Donald Trump's aggressive push to dictate oil flows in the Americas.
Developments in Venezuela continue to dominate headlines following the toppling of Nicolas Maduro, with most of the market reaction thus far playing out in commodities.
Oil prices have slid this week on the prospect of higher Venezuelan crude output, though they recovered on Thursday, with U.S. crude rising 0.7% to $56.38 a barrel, while Brent crude futures advanced 0.68% to $60.37 per barrel.
"The market's negative reaction to the Trump comments on controlling Venezuela's oil looks a little misplaced," said Daniel Hynes, ANZ's senior commodity strategist.
"U.S. control of oil sales could actually mean ongoing sanctions or restrictions remaining in place in the short term, which would be bullish for oil prices. I suspect that is why prices are recovering this morning."
Elsewhere, stocks were mixed in the Asian session, following a strong start to the New Year that lifted markets to fresh highs despite geopolitical fractures globally.
MSCI's broadest index of Asia-Pacific shares outside Japan swung between losses and gains while Japan's Nikkei fell 0.74%.
Nasdaq futures eased 0.02%, while S&P 500 futures ticked up 0.05%. European futures traded lower.
"It seems the Asian markets are just taking a breather after a strong start to 2026," said Charu Chanana, chief investment strategist at Saxo.
"Geopolitical headlines are in the driver's seat. China's dual-use export ban to Japan, and talk of potential rare earth risk, is making investors trim Japan beta."
Japan on Wednesday called China's ban on dual-use exports for its military "absolutely unacceptable", amid a looming threat of broader curbs on vital rare earths in an escalating dispute between Asia's top two economies.
U.S. NONFARM PAYROLLS UP NEXT
Geopolitics aside, investors also had their eye on the U.S. jobs report due on Friday, which could provide further clarity on the Federal Reserve's rate outlook.
Analysts at Goldman Sachs said they are forecasting an above-consensus 70,000 rise in nonfarm payrolls in December, while expecting the unemployment rate to edge down to 4.5%.
Overnight, a slew of data releases painted a mixed picture of the U.S. labour market, which appears stuck in a "no hire, no fire" state.
"The November JOLTS report signals that labor turnover remains muted. The low churn environment has underpinned a tenuous balance between labor demand and labor supply," said economists at Wells Fargo in a note.
"With firms still cautious about expanding headcount, we expect job growth to remain subdued."
The readings did little to alter market expectations of two more Fed cuts this year and in turn kept currency moves muted on Thursday, with the euro little changed at $1.1673 while sterling last bought $1.3454.
The yen eased slightly to 156.91 per dollar, while the dollar index was firm at 98.77.
Elsewhere, spot gold was down 0.11% at $4,448.20 an ounce. - Reuters
