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Oil set to hit Wall Street

U.S. stocks looked set to open lower on Monday, with investor sentiment hit by the news that major oil-producing countries had failed to agree to a freeze on crude output.

OPEC and non-OPEC oil-producing nations met on Sunday in Qatar to discuss a freeze. Hopes of a deal evaporated when Saudi Arabia said it would not freeze output unless Iran did. Iran was absent from the talks and had already said it was unwilling to freeze output.

However, oil traded well off lows touched overnight. On Sunday, Kuwait reduced its crude oil output and refining production as part of an emergency plan to help the OPEC member deal with the largest petroleum workers' strike in years, Reuters said. The news wire also cited a tweet from Kuwait Oil Company's account that said the company had cut crude output to 1.1 million barrels per day from its normal production level of about 3 million barrels a day.

Brent and WTI futures traded more than 3.5 percent lower, with U.S. crude oil futures for May delivery below $39 a barrel.

U.S. stock index futures held lower but well off lows as of 8:51 a.m. ET, with Dow futures trading about 50 points lower.

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"The post-Doha initial knee-jerk reaction lower is expected, but we expect prices to find support in the mid-$30/bbl range given an otherwise improving fundamental backdrop," Helima Croft, global head of commodity strategy at RBC Capital Markets, said in a report on Monday.

Symbol
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OIL
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Earnings season continued on Monday with quarterly results from Morgan Stanley. The financial giant posted better-than-expected earnings per share with revenue coming in roughly in line. PepsiCo also reported first-quarter results

IBM and Netflix are scheduled to report after U.S. markets close.

New York Fed President William Dudley said Monday morning that the normalization of monetary policy will likely remain "gradual and cautious" due to "significant uncertainties" and continued "headwinds to growth" from the financial crisis.

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Housing market indicators will dominate this week's U.S. economic data, with the NAHB housing index out on Monday.

The data was reported ahead of schedule, with the housing market index at 58 in April, unchanged from March, Reuters said.

Both Asian and European stock indexes traded lower early on Monday as a result of the "no-deal" from Qatar.

Verizon's prospective bid for Yahoo received a boost after potential bidders including Time, Alphabet, Comcast and AT&T exited the race, The Wall Street Journal reported on Sunday.

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