US pre-open: Stocks seen muted as investors eye oil

US futures pointed to a muted open on Wall Street, with energy-related stocks likely to come under pressure amid a drop in oil prices.

At 1135 GMT, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were up just 0.1%.

Remo Fritschi, institutional sales manager at ADS Securities, said: “There’s another quiet day ahead in terms of economic data and US futures prices are suggesting we’re going to see a relatively muted start to the day’s trade on Wall Street. Question marks still linger over just how equity valuations have managed to remain this inflated for this long, and although the prospect of a pro-business administration in the White House can offer some support, ultimately the threat of rate hikes – both in the US and further afield – could be the undoing of the rally.”

Meanwhile, oil prices were on the back foot after figures late on Tuesday from the American Petroleum Institute showed a 14.2m barrel build in its crude oil inventory last week, compared to a 5.8m barrel rise the week before and expectations for a 2.5m build. West Texas Intermediate was down 0.5% to $51.89 a barrel and Brent crude was off 0.2% to $54.93.

Prices are likely to remain in focus ahead of the US Energy Information Administration's crude oil stocks data at 1530 GMT.

Oanda's Craig Erlam said: “The staggering 14.2 million barrel increase comes as OPEC and non-OPEC producers are attempting to wrestle with the market oversupply and drive prices back towards more sustainable levels. The problem these producers are now facing is that their efforts have been so successful that US shale producers that were previously priced out are now returning in large numbers. This is preventing oil getting back above $60 a barrel and instead, we’re now seeing its trading back around the lows of the range it’s held in since the start of December. The sell-off since API reported its numbers on Tuesday has been quite substantial and should EIA confirm its analysis, we could see the lower end of the ranges come under serious pressure.”

On the corporate front, chicken processor Pilgrim’s Pride, botox maker Allergan and Time Warner are all due to report earnings ahead of the bell, while results are due from Whole Foods Market later in the day.

Elsewhere, Dow Chemical was likely to be in focus after it and DuPont offered to sell some businesses in a bid to win European regulatory approval for their merger.

Priceline Group shares were also likely to be active after it said late on Tuesday that it plans to buy Momondo Group in an all-cash deal worth $550m.

Property website Zillow Group slumped in pre-market trade after saying late on Tuesday that it expects a wider loss for the year than the market had been expecting.

Restaurant chain Panera Bread nudged up as it said it expects sales to continue to accelerate this year.