GLOBAL MARKETS: Crude oil slumps, Asian shares edge lower as global tensions climb

TOKYO- Crude futures slid and resource shares climbed in Asian trading as markets absorbed the impact of political upheaval in Venezuela and the fate of its petroleum reserves.

Oil prices continued their slide after U.S. President Donald Trump said Venezuela will be "turning over" up to 50 million barrels of oil to be sold at its market price following the toppling and capture of the nation's leader.

Japanese shares weighed down regional equity benchmarks, while commodity shares were broadly higher after an overnight surge in industrial metals prices.

The dollar held gains as geopolitical tensions from South America to China took centre stage while investors awaited data in the United States for clues about the timing of potential interest rate cuts by the Federal Reserve.

"The most likely outcome is a boost to the global economy because of that oil," Michael McCarthy, CEO of investment platform Moomoo Australia and New Zealand, said about the upheaval in Venezuela. "Clearly it's a negative for the oil price itself, but energy costs are key to your global economic outlook."

"The flip side to this is that the increase in uncertainty for the geopolitical outlook might overwhelm any positive economic benefits," he added.

U.S. crude CLc1 fell 1.1% to $56.48 a barrel and Brent LCOc1 fell to $60.22 per barrel, down 0.8% on the day. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.2%. Japan's Nikkei stock index .N225 slid 0.25%.

Australia's S&P/ASX 200 index .AXJO, heavily weighted by commodity producers, climbed 0.3%.

Caracas and Washington have reached a deal to export up to $2 billion worth of Venezuelan crude to the United States, Trump said on Tuesday.

The arrangement follows a weekend strike on Venezuela as well as comments by the White House that the U.S. was looking at options to acquire Greenland and the use of the U.S. military toward that goal was "always an option".

The dollar index =USD, which measures the greenback against a basket of currencies, was little changed at 98.60 after a 0.2% rally on Tuesday. The euro EUR= was steady at $1.169, while the yen JPY= weakened 0.05% to 156.73 per dollar.

Stocks in Tokyo were weighed down after China announced the ban on exports of dual-use items to Japan that can be used for military purposes, Beijing's latest move in reaction to a remark by Japanese Prime Minister Sanae Takaichi about Taiwan.

U.S. share benchmarks brushed aside the global tensions to reach record levels overnight. Copper soared to a record high in the previous session while nickel jumped more than 10% as supply concerns spurred gains in key industrial resources.

Looking ahead, a U.S. monthly employment report on Friday will influence the market's monetary policy expectations, which are currently pricing in two more Fed rate cuts this year. Ahead of that are the JOLTS survey and ADP private payrolls on Wednesday.

In the Asian trading day, data showed Australian consumer prices rose by less than forecast in November and core inflation slowed slightly. A private sector survey in Japan showed the service sector expanded last month at its slowest pace since May.

Spot gold XAU= fell 0.6% to $4,469.04 an ounce. Copper CMCU3 declined 0.1% to $13,111.50 a tonne.

In early European trading, the pan-region Euro Stoxx 50 futures STXEc1 were up 0.1% at 5,959, German DAX futures FDXc1 were up 0.2% at 25,099, FTSE futures FFIc1 were down 0.24% at 10,123.5. U.S. stock futures, the S&P 500 e-minis ESc1, were flat at 6,987.5.

In cryptocurrencies, bitcoin BTC= fell 0.8% to $92,499.05, and ether ETH= declined 0.5% to $3,257.66.

-Rocky Swift in Tokyo; Editing by Christopher Cushing/Reuters