An oil well is seen near Denver, Colorado. Picture: Reuters
An oil well is seen near Denver, Colorado. Picture: Reuters

New York — Oil prices dropped 3% on Monday, putting pressure on energy shares and keeping global stock markets in check, although financial shares rallied after upbeat news from Bank of America and Deutsche Bank.

In oil markets, concerns about supply disruptions eased and Libyan ports reopened while traders eyed potential supply increases by Russia and other producers.

US crude fell 4.03% to $68.15 per barrel and Brent was last at $72.11, down 4.27% on the day.

Wall Street’s main indices were little changed following strong weeks as investors geared up for a big week of corporate earnings and awaited commentary on the effect of trade disputes between the US and its partners.

"Trade and trade rhetoric will be a focus of the market," said Mona Mahajan, US investment strategist at Allianz Global Investors in New York.

"As we get into earnings season in particular we are going to be watching for management teams to discuss their outlooks not only in the numbers but more generally anecdotally how trade could impact their businesses."

The Dow Jones industrial average rose 8.96 points, or 0.04%, to 25,028.37, the S&P 500 lost 3.9 points, or 0.14%, to 2,797.41 and the Nasdaq Composite dropped 10.30 points, or 0.13%, to 7,815.68.

Major energy stocks such as Exxon Mobil, Chevron and Royal Dutch Shell weighed on key indices.

Financials in the US and Europe were higher following Bank of America’s better-than-expected quarterly profit and Deutsche Bank’s upbeat earnings preview.

Overall in Europe, the pan-European FTSEurofirst 300 index lost 0.29%. MSCI’s gauge of stocks across the globe shed 0.15%. Investors were watching for any developments from a meeting between the leaders of the US and Russia.

Markets also looked to US Federal Reserve chairman Jerome Powell’s semi-annual testimony on the economy and monetary policy before the US Senate Banking Committee on Tuesday.

The dollar fell, having posted its largest weekly gain in a month last Friday, as risk appetite improved, prompting investors to pare back some of their long bets on the greenback.

The dollar index fell 0.2%, with the euro up 0.17% to $1.1705.

US treasury yields held at higher levels as data on domestic retail sales in June reinforced the view that consumer spending was increasing at a solid clip for robust economic growth in the second quarter.

Benchmark 10-year notes last fell 10/32 in price to yield 2.8674%, from 2.831% late on Friday.

Spot gold dropped 0.2% to $1,238.91 an ounce.

With Tommy Wilkes