CANADA STOCKS-TSX pulls back from record high as commodity prices fall

By Utkarsh Hathi and Fergal Smith

Jan 7 (Reuters) - Canada's main stock index pulled back on Wednesday from a record high as commodity prices declined and investors weighed the need for Canada to diversify its trading partners.

The S&P/TSX Composite index .GSPTSE ended down 271.53 points, or 0.8%, at 32,135.49, after posting a record closing high on Tuesday.

The U.S. seized two Venezuela-linked oil tankers in the Atlantic Ocean as part of President Donald Trump's aggressive push to dictate oil flows in the Americas and force Venezuela's socialist government to become an ally.

Investors have worried that a boost in Venezuelan oil exports to the United States could hurt Canadian companies that sell a similar heavy oil.

"The supply needs for the U.S. are still quite substantial. Even as they get the Venezuela oil back, there's going to be the need for Canadian oil," said Shiraz Ahmed, founder of Sartorial Wealth.

"It's still a low-cost and low-risk solution for the U.S., but it will put some pressure on Canada to diversify trade."

Canadian Prime Minister Mark Carney will visit China January 13-17, his office said, in what will be the first visit by a Canadian prime minister since 2017. Carney is trying to diversify Canada's exports away from its main market, the United States, as Canada faces uncertain U.S. trade policy.

Canada's trade data for October is due on Thursday. Economists expect the trade balance to swing to a deficit of C$1.4 billion, after it posted a surprise surplus in September.

The energy sector .SPTTEN fell 1.5%, adding to this week's decline, as the price of oil CLc1 settled 2% lower at $55.99 a barrel.

Gold XAU= and copper HGc1 prices also fell, giving back some recent gains. The materials group .GSPTTMT, which includes metal mining shares was down 0.6%.

Industrials ended 2.4% lower as railroad stocks declined, and heavily weighted financials lost 0.8%.