US pre-open: Stocks seen touch weaker as focus remains on oil

US futures pointed to another downbeat session on Wall Street on Thursday as investors kept a close eye on oil prices after they fell to a 10-month low in the previous session.

At 1105 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all down 0.1%.

Meanwhile, oil prices were recovering from Wednesday's heavy losses, with West Texas Intermediate up 0.7% to $42.81 a barrel and Brent crude up 0.9% to $45.21. Prices slipped into bear market territory earlier in the week amid worries about growing supply from Nigeria, Libya and the US. They briefly gained ground on Wednesday following a report that Iran's oil minister said Iran and other OPEC members were mulling further cuts.

Chris Beauchamp, chief market analyst at IG said: "Tech stocks put in a good showing last night in the US, but overall the market remains fixated on what happens with oil. OPEC’s failure to control the narrative, plus its inability to clamp down on ever-increasing supply levels, has reignited fears that oil could return to the lows of 2016.

"Blaming Libya and Nigeria is missing the point - the oil market faces a fundamental readjustment that will be protracted and painful. Ahead of the open, we expect the Dow to start at 21,400, down 10 points from last night’s close."

In corporate news, Oracle Corp was sharply higher in pre-market trade after better-than-expected earnings late on Wednesday.

On the macroeconomic front, initial jobless claims are at 1330 BST. The consensus is for a 240,000 increase, up from last week's reading of 237,000. In addition, the housing price index is due at 1400 BST amid expectations of a 0.4% rise for April.

Market participants will also be watching out for a speech from Federal Reserve governor Jerome Powell, who is due to testify to the Senate Banking Committee on bank reform at 1500 BST.