US pre-open: Futures point higher as oil prices edge forward

US stock futures were pointing to a strong opening for Wall Street on Monday, as oil prices began the week on a positive note.

The Dow Jones Industrial Average is expected to open approximately 91 points higher than Friday’s close of 17,280.83 , while the S&P 500 and the Nasdaq are expected to open 12 and 29 points higher respectively.

A decline in oil prices weighed heavily on the markets last week, as the Dow Jones Industrial Average recorded its worst week of the year and its biggest weekly percentage fall since November 2011.

However, crude prices rose slightly on Monday, boosted by news of the closure of two Libyan oil terminals, as West Texas crude futures gained 33 cents to just over $58 a barrel, while January Brent crude was up 86 cents to just over $62.5 a barrel.

Meanwhile, the Empire State manufacturing index fell to -3.6 in the December reading from a 10.2 reading in the previous month, well below consensus expectations of 12.4. The weaker-than-expected reading on regional manufacturing is the first outright contraction in activity since January 2013.

The new orders index fell to 2.0 from 9.1 and the shipments index dropped to -0.2 from 11.8, retracing the mid-year rebound in activity.

However, analysts warned against reading too much into the index’s decline.

“This survey is so volatile that it is foolish to take the figure in any one month too seriously. For example, the index fell within a whisker of zero twice in 2011 and once in 2012, but on all three occasions GDP growth stayed close to 2%,” said Paul Dales, Senior US economist at Capital Economics.

“It’s also worth mentioning that the alternative Philadelphia Fed index rose to a 20-year high of 40.8 in November. We don’t believe things are that good either.

In corporate news, Opko Health soared 13% before the bell, after the biopharmaceutical firm announced a deal with Pfizer to develop its treatment for growth hormone deficiency.

Under the deal, Opko will receive an upfront payment of $295m, and will be eligible to receive an additional $275m if it reaches certain targets.

PetSmart rose in pre-market trading after announcing it had agreed to a takeover from a group led by BC Partners for over $8.2bn, while Talisman Energy soared after reports that Repsol was in talk to buy the Canadian firm.

US industrial production grew at a 1.3% month-on-month pace in November (consensus: 0.7%), led by a jump in output from the manufacturing and utilities sectors, according to the Federal Reserve.

The National Association of Home Builders index for December is due at 10:00 Eastern.