Futures point higher as oil prices jump ahead of OPEC meeting

[June 22, 2018]   By Medha Singh

(Reuters) - U.S. stock index futures rose on Friday as oil prices jumped ahead of an OPEC meeting later in the day and in the absence of any significant developments in the China-U.S. trade rhetoric overnight.

Oil prices rose more than a percent as OPEC appeared to be nearing a deal to boost supply to make up for losses in production at a time of rising global demand.

A recent rally in oil prices due to an OPEC decision to restrict supply in an effort to drain global inventories, has made the S&P energy <.SPSY> the best performing S&P sector in the last three months.

The OPEC meeting in Vienna comes amid calls to cool down the price of crude and prevent an oil deficit that would hurt the global economy.

At 7:17 a.m. ET, Dow e-minis <1YMc1> were up 104 points, or 0.42 percent. S&P 500 e-minis <ESc1> were up 11.5 points, or 0.42 percent and Nasdaq 100 e-minis <NQc1> were up 22.25 points, or 0.31 percent.

Anxiety over a possible full-blown trade war deepened this week after U.S. President Donald Trump threatened on Monday to impose tariffs on $200 billion of Chinese imports and Beijing vowed to retaliate.

The trade spat has pushed the Dow Jones Industrial Average <.DJI> in the red for the past eight sessions and put it on track for its worst weekly performance in 13 weeks.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 19, 2018. REUTERS/Brendan McDermid

The Dow, which is heavily affected by industrial companies such as Caterpillar <CAT.N> and Boeing <BA.N>, has lost 2.5 percent so far this week. The benchmark S&P 500 <.SPX> is down 1.1 percent while the tech-heavy Nasdaq is off 0.4 percent.

Individual industries such as agriculture, autos and technology look set to be hit hard if President Trump follows through with duties on $450 billion of imports from China.

Among stocks, open source software provider Red Hat <RHT.N> slumped 13.2 percent after its current-quarter and full-year revenue missed analyst expectations due to a strengthening dollar.

Separately, Markit Manufacturing Flash PMI data for June is likely to come in at 56.5 compared to a reading of 56.4 last month.

(Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta)
 

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