Portfolio

US pre-open: Futures point to losses following attack on Saudi Arabian oilfield

By Iain Gilbert

Date: Monday 16 Sep 2019

US pre-open: Futures point to losses following attack on Saudi Arabian oilfield

(Sharecast News) - Wall Street futures had stocks opening weaker on Monday after an attack on a Saudi Arabian oilfield and the country's key processing facility sparked fears that a surge in crude prices could trigger a slowdown in the global economy.
As of 1200 BST, Dow futures were down 0.40%, while S&P 500 and Nasdaq futures had the indices opening 0.39% and 0.59% lower, respectively.

West Texas Intermediate futures soared more than 11% to $61.25 per barrel after a series of drone strikes took out roughly half of Saudi Arabia's daily crude production.

Donald Trump said the US would be able to use oil from its Strategic Petroleum Reserve in order to keep the market "well-supplied".

AxiTrader's chief market analyst James Hughes said: "As the new trading week gets underway, the stand out story is the attack on Saudi Arabia's oil infrastructure and the fact that the temporary removal of as much as 6% of global output has seen crude prices lurch dramatically higher."

Hughes noted that although higher oil prices can offer some support for major energy firms, as had been seen in early European trading, a jump of this size was "bad news for consumers".

"With the US economy already risking a slide into recessionary territory, if this spike is sustained then markets could be in for something of a shock," he added.

Also weighing on sentiment was news that Chinese industrial production fell to a 17-year low in August, while retail sales also weakened.

Industrial production growth slowed to 4.4% year-on-year in August from 4.8% in July, falling short of expectations for a 5.2% increase. Retail sales growth slowed to 7.5% in August from 7.6% the month before, missing expectations of 7.9% growth.

On the data front, September's Empire State manufacturing survey was set for release at 1430 BST.

There were no major corporate earnings scheduled for release on Monday.

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