Wall Street set to open in black as oil prices surge

Wall Street was set to open higher on Friday with the Dow on track to snap an 8-day losing streak, helped by a surge in oil prices as OPEC neared a deal to boost output, while there were no significant developments in the China-U.S. trade rhetoric.

Wall Street was set to open higher on Friday with the Dow on track to snap an 8-day losing streak. Image source: Pixabay

Wall Street was set to open higher on Friday with the Dow on track to snap an 8-day losing streak, helped by a surge in oil prices as OPEC neared a deal to boost output, while there were no significant developments in the China-U.S. trade rhetoric. The benchmark Brent crude jumped 2.8 percent to $75.07 a barrel, following three days of declines, after OPEC agreed on Friday to raise production by around 1 million barrels per day from July for the group and its allies, according to a source.

A recent rally in oil prices due to an OPEC decision to restrict supply in an effort to drain global inventories, has helped S&P energy become the best performing S&P sector in the last three months. The OPEC meeting in Vienna comes amid calls to cool down the price of crude and prevent an oil deficit that would hurt the global economy.

"The market wants some sort of positive commentary out of OPEC ... less uncertainty about the OPEC is always a good thing," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

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"Above $75 people really start to complain about oil impacting the consumer or companies."

Friday also marks what would likely be the biggest trading day of the year as a Russell rebalance takes effect at markets close.

A reconstitution of the Russell 1000 large cap and Russell 2000 small cap prompts fund managers to adjust their portfolios to reflect new weightings.

At 8:46 a.m. ET, Dow e-minis were up 125 points, or 0.51 percent. S&P 500 e-minis were up 14 points, or 0.51 percent and Nasdaq 100 e-minis were up 30.5 points, or 0.42 percent.

Anxiety over a possible full-blown trade war worsened earlier this week after U.S. President Donald Trump threatened to impose tariffs on $200 billion of Chinese imports and Beijing vowed to retaliate.

The trade spat has pushed the Dow Jones Industrial Average in the red for the past eight sessions and put it on track for its worst weekly performance in 13 weeks.

The 30-component Dow has lost 2.5 percent so far this week. The benchmark S&P 500 is down 1.1 percent while the tech-heavy Nasdaq is off 0.4 percent.

Among stocks, open source software provider Red Hat Inc slumped 13.2 percent after its current-quarter and full-year revenue missed analyst expectations due to a strengthening dollar.

Separately, Markit Manufacturing Flash PMI data for June is likely to come in at 56.5 compared to a reading of 56.4 last month.

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