Lower Open Expected For US Markets: Oil Down

Lower open expected for the U. S markets Thursday after top U.S stock index futures, especially Dow Jones, were steeply down on Thursday morning.

Market participants heightened focus on the trade war between the U.S and China. At around 6:30 a.m. ET, Dow futures hinted a negative open of more than 230 points. The S&P and Nasdaq futures were also down.

Market mood dipped as media reports indicated the U.S. administration may sanction Chinese surveillance equipment provider Hikvision from buying U.S. components and technology. Similar action was initiated on Huawei Technologies as well.

At the data front, Thursday will see jobless claims, manufacturing, and services PMI for May, and new home sales data of April.

Earnings will be reported by Medtronic, Royal Bank of Canada, and Best Buy before the bell and Autodesk, Hewlett Packard, and Intuit will release their earnings report after market close.

Asian markets decline

The Asian markets, mainly China markets were down Thursday as investors concern heightened the ongoing trade tensions between the United States and China.

The Shanghai composite slipped 1.36 percent. Hong Kong’s Hang Seng index fell 1.73 percent at the final hour of trading. Japan’s Nikkei 225 also slipped 0.62 percent. The Topix index lost 0.36 percent. South Korea’s Kospi plunged 0.26 percent and Australia’s ASX 200 plummeted 0.29 percent.

In Europe, the Stoxx Europe 600 Index fell after an EU official said the U.S. will not start trade talks with the bloc as it is preoccupied with China. This pulled down the auto stocks by nearly 3 percent.

Oil market

Oil prices fell on Thursday amid surging U.S. crude inventories and falling demand from refineries.

Brent crude futures fell 37 cents to $70.62 per barrel at 0109 GMT, from their last close. The U.S. West Texas Intermediate (WTI) crude futures were down by 0.5 percent, at $61.11 per barrel.

“Rising inventories and a slowdown with refined product demand could suggest further pressure on prices,” said Edward Moya, senior analyst at futures brokerage Oanda.

The U.S. crude inventories added 4.7 million barrels more in the week ended May 17 raising capacity to 476.8 million barrels, highest in two years, per the EIA data.

Amidst the bearish factors supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) are in focus.

French bank BNP Paribas said high inventories may force OPEC to prolong its voluntary supply cuts beyond the end-June deadline.

Gold prices flat

Gold prices remained flat on Thursday after the U.S, China trade tensions bolstered the dollar, pushing gold investors to look for direction.

The dollar got a boost from the minutes of the U.S. Federal Reserve meeting of May 1 that showed rates will not change.

Spot gold was flat at $1,274.03 per ounce as of 0725 GMT. The U.S. gold futures were also firm at $1,274.20.

“The short-term effect of the U.S.-China trade conflict is driving up the U.S. dollar index and not helping gold, ” commented Nicholas Frappell, global general manager at ABC Bullion.