Oil prices rose in volatile trading on Monday on hopes an agreement to cut output could be reached at an OPEC meeting this week but stocks moved lower, putting four-day winning streaks for the S&P 500 and Dow Jones Industrial Average in jeopardy.
West Texas Intermediate crude oil gained 2% Monday to $47 a barrel after trading in and out of positive territory for much of the morning.
The S&P 500 fell 0.35%, the Dow Jones Industrial Average declined 0.36% and the Nasdaq tumbled 0.28%.
Saudi Arabia suggested over the weekend that OPEC didn't need to reduce output to rebalance the oil market as increasing demand in 2017 would serve to drain a supply glut that has weighed on prices.
"There's so much doubt regarding this OPEC meeting," Stephen Guilfoyle, president of Sarge986, said in a phone interview. "I think there's a lot of smoke here, smoke and mirrors. They'll probably come to some kind of agreement, at least in principle, because they have to because there's a lot of pressure on them."
Saudi Arabia pulled out of a planned meeting on Monday with non-OPEC oil producers, claiming the get-together was pointless until OPEC finalized its production targets. The 14-nation OPEC cartel is scheduled to meet Wednesday in Vienna.
"The price of oil has certainly stabilized," Guilfoyle said, highlighting that since OPEC been talking about a deal the price of oil has stayed around $40 beginning in late February.
The U.S. Dollar Index, which is a measure of the dollar relative to six foreign currencies, rose 0.06% to 101.46. The index had been lower for most of early Monday.