Energy stocks closed mixed Friday, with a valiant rally in oil service stocks failing to pull integrated oil and natural gas stocks back into the green, despite support from higher crude oil and natural gas prices.
Crude for June delivery staged a late comeback, rising $1.40 to close at $66.46 a barrel on the New York Mercantile Exchange after spending most of the morning unchanged to slightly lower. Natural gas prices had an even bigger rebound, up 3%. See Futures Movers.
At the close, the Philadelphia Oil Service Index ($OSX :0.00, 0.00, 0.0% ) was up 1.3% at 238.2 points. For the week, the index rose 6.3%, by far the best performer in the sector.
Rally in oil service stocks fails to lift sector
National Oilwell Varco (NOV : 86.65, +3.84, +4.6% ) topped percentage gainers in the services group, advancing 4.6% Friday to $86.65. Before the opening bell, National Oilwell reported it more than doubled its first-quarter profit, citing a deep backlog of orders from the offshore rig industry and forecasts of continued strong growth internationally. See full story.
Meanwhile, the Amex Natural Gas Index ($XNG :496.59, -1.30, -0.3% ) slipped 0.3% to 496.6 points, leaving it with a 0.8% gain for the week. The index was pressured by a 1.8% drop in Nicor Inc.'s (GAS :52.04, -0.96, -1.8% ) share price to $52.04 triggered by disappointing earnings.
Nicor said its first-quarter net income rose to $47.2 million, or $1.04 a share, from $43.9 million, or 99 cents, a year ago. Excluding one-time items, however, the company earned 93 cents a share. Analysts had been looking for a profit of $1.01 a share. See full story.
The Amex Oil Index ($XOI : 1,284.45, -4.71, -0.4% ) fell 0.4% Friday to finish at 1,284.5 points. The index was up 1% for the week, however, buoyed by earnings reports from the of the world's biggest oil companies - many of them beating analysts' expectations.
Chevron Corp. (CVX : 78.08, -0.10, -0.1% ) was the latest to join that list, posting an 18% rise in first-quarter earnings, much of the gain built on the sale of Dutch refinery. Like Exxon on Thursday, Chevron said upstream earnings were hurt by lower oil and gas prices while refining margins soared in the downstream end of the business.
The company topped Wall Street estimates, posting a profit of $1.86 a share from ongoing operations. Analysts had been looking for $1.67. See full story.
Chevron's earnings report did not translate into a higher share price, however. The stock dropped 10 cents to close at $78.08.
Exxon Mobil Corp. (XOM : 80.36, -0.19, -0.2% ) , which reported a 10% higher profit Thursday, fell 19 cents to $80.36, while U.S.-traded shares of Spain's Repsol S.A. (REP : 33.38, -0.62, -1.8% ) led decliners in the group with a 1.8% drop to $33.38.
Valero Energy Corp. (VLO : 71.21, -0.53, -0.7% ) got a nod of approval from Credit Suisse a day after the refiner reported a 30% higher first-quarter profit and tripled the size of its share buyback program. Credit Suisse raised its target price on the company to $81 a share from $70 and predicted it would earn $8.21 a share in 2007, up 6% from its previous estimate.
Valero shares fell 53 cents, or 0.7%, to $71.21.
Baker Hughes Inc. (BHI :81.01, +0.19, +0.2% ) , in its weekly rig update, reported the number of drilling units searching for oil or gas in North America fell by 39 this past week to 1,828. The total count for U.S. rigs in operation decreased by 22 from last week to 1,747. The number of U.S. offshore rigs fell by three to 73. The weekly Canadian rig count fell by 17 to 81. Overall, the U.S. rig count was 139 units higher than a year ago, with the Canadian tally falling by 69 from last year.
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