US pre-open: Stocks seen touch weaker after Doha meeting

US futures pointed to a marginally weaker open on Wall Street as oil prices retreated after this weekend’s meeting of oil-producing countries failed to yield an agreement to freeze output.

“US markets are expected to open lower on Monday in line with the drop in the oil price that has caused global equity markets to retreat. But with almost 100 S&P 500 companies reporting this week, focus is likely to soon shift to the quarterly results,” said CMC Markets’ Jasper Lawler.

At 1100 BST, Dow Jones Industrial Average futures were down 0.2% while S&P 500 and Nasdaq futures were off 0.3%.

At the same time, oil prices were firmly in the red but well off the lows seen in Asian trade. West Texas Intermediate was down 3.2% to $39.06 a barrel while Brent crude was 2.6% lower at $42.00.

At Sunday’s meeting of oil producers in Doha, Qatar, OPEC and non-OPEC producers failed to reach an agreement on a production cap. Ahead of the summit, investors had been expecting the oil producers, which include Saudi Arabia and Russia, to agree to freeze production at January levels after Russia, Saudi, Qatar and Venezuela said in February that they would if other producers joined them.

However, Iran – which had already made it clear it would not freeze or cut production until it recovered a market share similar to what it had before sanctions were imposed – did not send a representative to the meeting. Saudi Arabia, meanwhile, insisted it would not freeze production if Iran did not participate.

“It will be the tension between Saudi Arabia and Iran that gets the blame for the breakdown in talks from the summit in Doha over the weekend,” said James Hughes, Chief Market Analyst at GKFX.

“The tensions between Iran and Saudi Arabia go deeper than just that of agreeing on oil output, the two nations compete for power in the Middle East and are already fighting unofficial conflicts with each other in areas of Syria and Yemen."

"The failure to reach a deal is expected to have a huge negative impact on the downside for oil prices, after many expected the major stumbling blocks to come from the Russian side. The bearish catalyst could well see oil prices tumble more than the initial fall back to $38, with Goldman predicting an average price of $35 a barrel for the year.”

On the corporate front, Morgan Stanley is slated to report first-quarter earnings before the opening bell, with numbers from Netflix and IBM due after the close.

Elsewhere, Yahoo was likely to be in focus as the deadline for preliminary bids for the company looms.

In currencies, the dollar was flat against the pound, 0.1% weaker versus the euro and 0.2% higher against the yen.

The macroeconomic front was looking fairly quiet, with just the NAHB housing market index due at 1500 BST.