Energy stocks got a lift Monday from sharply higher natural-gas prices as frigid weather blanketed much of the Midwest and Northeast, driving up heating demand.
In early action, the Amex Natural Gas Index ($XNG :462.31, +2.42, +0.5% ) was up 0.5% at 462.2 points, and the Philadelphia Oil Service Index ($OSX :198.92, +0.87, +0.4% ) was up 0.7% at 199.36. The Amex Oil Index ($XOI :1,174.72, -1.13, -0.1% ) was up a more modest 0.1%, standing at 1,177 points. Behind the gains was a 5% jump in March natural-gas futures on the New York Mercantile Exchange. See Futures Movers.
Temperatures on the East Coast are forecast to drop as much as 30 degrees Fahrenheit below normal in the populous Northeast on Monday, and they'll remain colder than usual through much of the week -- a sharp contrast to the balmy start to the winter heating season, but unlikely to make a major dent in the nation's oversupply of natural gas already in storage.
On the corporate front, Goldman Sachs upgraded BP Plc (BP :63.76, +0.11, +0.2% ) to buy from neutral with the broker saying the U.K.-based oil giant's stock carries an attractive valuation.
"In our view, BP can put the majority of its recent troubles behind it and move forwards. The Feb. 6 strategy update is a key potential catalyst in this respect -- despite the high probability of lower guidance targets, we see the 2007/08 outlook as improving," the broker said.
BP's shares were up 0.1% at $63.74 in morning trading.
Chevron Corp. (CVX :74.08, +0.04, +0.1% ) , which on Friday posted a 9% drop in fourth-quarter profit, was downgraded to sell from hold by Deutsche Bank. Shares of the No. 2 U.S. oil company traded fractionally lower.
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