U.S. market indexes opened lower Monday after a much anticipated OPEC meeting in Doha resulted in continued negotiations on oil market supply globally with no resolution on oil supply caps. While many believed Sunday’s meeting would have a favorable outcome, the absence of oil market leader Iran and continued dissension between Saudi Arabia and Iran were the main factors leading to unresolved supply levels. As a result, pre-market trading Monday saw WTI oil fall further reaching nearly $35 a barrel.
With a major week of first quarter earnings ahead, including reports from the majority of Dow Jones Industrial Average companies, as well as over 100 companies from the S&P 500, the news on oil prices will likely drag further on the market during what is already expected to be a difficult week with corporate earnings trending lower across nearly all sectors.
Energy sector companies Exxon (XOM, Financial) and Chevron (CVX, Financial) both also opened lower on Monday with earnings reports scheduled for next week. Meanwhile Citigroup (C, Financial) released a report Monday reflecting the market’s negative sentiment and downgrading the overall outlook for the U.S. economy through the remainder of the year. With decreased optimism on potential oil supply caps reducing the outlook also for OPEC’s next meeting in June, it appears the effects on the economy overall from the continued struggles in the energy sector may be harsher than previously predicted.
In a CNBC interview Monday, energy specialists David Hewitt and Eric Robertsen discussed their insight on the weekend’s meeting and outlook for the energy sector in 2016.
Disclosure: I do not own any shares of any stocks mentioned in this article.
