Morning Bid: The Spoils of Oil

The Spoils of Oil: Venezuelan Market Shifts and Global Impact

A look at the day ahead in European and global markets from Rocky Swift

As Venezuelan President Nicolas Maduro awaits his fate in a New York jail, nearly $2 billion worth of the nation's oil appears to be bound for the United States as well.

The toppled leader and the country's petroleum reserves are two immediate spoils from U.S. President Donald Trump's recent embrace of military force to achieve policy goals. In recent days, he's hinted at strikes against Colombia and Mexico, as well as using U.S. Armed Forces in taking frigid Greenland, long an object of fascination for the Trump administration.

Markets have taken the events largely in stride, with crude reacting the most on the prospect of some 50 million barrels of sanctioned Venezuelan oil due to be shipped and sold in the U.S. under a plan announced by Trump.

U.S. oil executives are expected to visit the White House as early as Thursday to discuss investments in Venezuela, according to three sources familiar with the planning.

Rising geopolitical risks, which include simmering tensions between China and its neighbours, have kept the safe haven of gold near its record high. And supply concerns for industrial metals have driven a spike in prices, including all-time highs for copper.

Asian shares traded mostly lower, failing to keep up momentum that drove U.S. and European benchmarks to record levels overnight. Japanese shares in particular were weighed down as a diplomatic rift with China resulted in Beijing banning exports of certain goods that can be used for military purposes, a move decried by Tokyo as "unacceptable".

It's not all sabre-rattling. The main economic event this week remains key U.S. employment data on Friday that offer hints on monetary policy from the Federal Reserve, with markets pricing in two more rate cuts this year. But as a prelude, Wednesday brings the Job Openings and Labor Turnover Survey (JOLTS) as well as ADP private payrolls data.

Key developments that could influence markets on Wednesday:

- German data on retail sales, unemployment

- France consumer confidence for December

- Construction PMIs for euro zone, Germany, France, Britain

- U.S. JOLTS, ADP employment reports

(Editing by Sonali Paul)