Oil and gas stocks opened higher Wednesday, jarred by a brief overnight spike in crude prices past $68 a barrel, their highest level so far this year.
Tensions between Iran and the West have sharpened significantly since Friday, when Iran seized 15 British navy personnel in the Gulf. The sailors remain in Iranian custody while the diplomatic crisis surrounding their fate has heightened concerns of possible supply disruptions from the oil-rich region.
On the New York Mercantile Exchange, crude for May delivery soared to $68.09 late Tuesday on rumors, swiftly denied by the Pentagon, that a U.S. warship had come under attack off Iran. Though the contract quickly backed down, it was still trading $1.62 higher at $64.55 a barrel early Wednesday as traders padded the contract's risk premium. Price volatility in the oil trading pits kept upward pressure on oil stocks, with investors keeping an extra close eye on companies with the greatest exposure to Mideast supplies or those likely to benefit most from production slates well outside the region.
On the New York Mercantile Exchange, crude for May delivery soared to $68.09 late Tuesday on rumors, swiftly denied by the Pentagon, that a U.S. warship had come under attack off Iran. Though the contract quickly backed down, it was still trading $1.62 higher at $64.55 a barrel early Wednesday as traders padded the contract's risk premium. Price volatility in the oil trading pits kept upward pressure on oil stocks, with investors keeping an extra close eye on companies with the greatest exposure to Mideast supplies or those likely to benefit most from production slates well outside the region.
In early action, the Amex Oil Index (XOI :1,230.45, +6.55, +0.5% ) 0.9% higher at 1,234 points. The Amex Natural Gas Index (XNG : 475.90, +0.35, +0.1% ) , far less exposed to the overseas turmoil, was up 0.3%, at 447.1 points and the Philadelphia Oil Service Index ($OSX : 215.13, -1.65, -0.8% ) was essentially unchanged at 216.7 points.
Exxon Mobil Corp. (XOM :75.50, -0.21, -0.3% ) , a Dow 30 company with a vast international production profile, was up 37 cents, or 0.5%, at $76.08 a share while Chevron Corp. (CVX :74.01, -0.16, -0.2% ) was up 0.2% at $74.33. BP Plc (BP : 64.97, +0.72, +1.1% ) was leading gainers among the big international oil companies trading in the U.S. on a 1.7% rise to $65.36.
