Crude prices shot higher on Monday after a drone attack knocked out much of Saudi Arabia’s oil production at the weekend.
The lower open threatened to break an eight-day winning streak for the benchmark Dow Jones Industrial Average, with the major US stock indices just below fresh record highs.
Markets were also digesting a batch of poor economic data out of China and awaiting Wednesday’s Federal Reserve announcement on monetary policy.
Ten minutes into the day’s trading, the Dow and broader S&P 500 were both down 0.4 percent at 27,112.32 and 2,996.52 respectively.
The tech-heavy Nasdaq was 0.5 percent lower at 8,139.64.
While the spike in oil prices — WTI benchmark crude was up a towering $5.32 at $60.17 per barrel — sent oil stocks higher, investors may fear more expensive oil could further slow an already waning global economy.
Oil supermajors Exxon Mobil and Chevron were up 2.6 percent and 2.7 percent respectively.
Fresh economic data on Monday showed activity in China slowed last month across the board, with the pace of industrial production, retail sales and investment in fixed assets all lower.