By Hideyuki Sano
TOKYO (Reuters) - Oil prices stood near their highest since late 2014 on Tuesday, ahead of an announcement by U.S. President Donald Trump on whether he would withdraw from a landmark nuclear deal with Iran, which fuelled concerns about crude supply.
Asian shares firmed slightly in early trade with technology stocks resilient after generally upbeat earnings despite weakness in the global smartphone market and concerns about more regulation.
U.S. West Texas Intermediate (WTI) crude futures
Oil prices later pared some of those gains as traders took profit after Trump confirmed in a tweet that he would announce his decision on the nuclear deal at 1800 GMT on Tuesday.
"The oil market has priced in the high likelihood of Trump withdrawing from the nuclear deal with Iran. If he is going to impose sanctions similar to those the U.S. had in 2012, that would likely to cause a shortage in oil," said Tatsufumi Okoshi, senior commodity economist at Nomura Securities.
In addition, falls in Venezuelan oil production due to problems at the country's oil company PDVSA also added to the rally.
U.S. crude futures last traded at $70.04 per barrel, down 1.0 percent from Monday's settlement price.
Global benchmark Brent crude futures
While caution on Trump's statement kept many investors on edge, Asian shares made small gains, led by technology firms.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> gained 0.2 percent, with information technology shares <.MIAPJIT00PUS> rising 0.4 percent. Japan's Nikkei <.N225> was almost flat.
On Wall Street on Monday, the S&P 500 <.SPX> gained 0.35 percent, boosted by Apple's
In currency markets, the dollar broadly held firm on the prospect of solid U.S. economic growth, helped partly by Trump's tax cuts and spending, pointed to further rises in U.S. interest rates down the road.
That prompted investors to buy back dollars they had sold earlier this year on worries about Trump's protectionist trade policies.
The euro hit a four-month low of $1.1897 on Monday and last stood at $1.1924
Against the yen, the dollar stood little changed at 109.07 yen
The combination of higher oil prices, a strong dollar and higher U.S. rates is risky for some emerging market assets as it could significantly worsen their trade balance and also encourage investors to shift funds to higher-yielding U.S. assets.
JPMorgan's emerging market bond index <.JPMECORE> hit the lowest level in more than a year.
The Indian rupee
The divergence between developed and emerging markets was also visible in equity prices. Brazil's Bovespa <.BVSP> hit three-month lows while Germany's Dax <.GDAXI> hit three-month highs and Italian shares <.FTSE> hit 8-1/2-year highs.
(Editing by Sam Holmes)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: May 08, 2018 07:05:16 IST