Oil stocks move up on supply concerns
In early action, the Amex Oil Index ($XOI :1,255.50, +8.11, +0.7% ) was ahead 0.5% and the Philadelphia Oil Service Index ($OSX :222.39, -0.40, -0.2% ) was up 0.4%.
In early action, the Amex Oil Index ($XOI :1,255.50, +8.11, +0.7% ) was ahead 0.5% and the Philadelphia Oil Service Index ($OSX :222.39, -0.40, -0.2% ) was up 0.4%.
Spearheading the drive was a$1 jump in crude-oil prices, with the May contract briefly topping $63 on the New York Mercantile Exchange. The move follows the Energy Department's weekly report on Wednesday of an unexpectedly slow rise in U.S. crude-oil inventories and a surprisingly steep drop in gasoline supplies just as the nation gears up for the summer driving season. See Futures Movers.
Hess Corp. (HES : 56.99, +0.59, +1.0% ) was leading percentage gainers in the Amex oil group, up 1.3% at 57.16 a share, while Sunoco Inc. (SUN : 73.58, -0.37, -0.5% ) was the index's sole decliner, down 0.2% at $73.75. Meanwhile, the Amex Natural Gas Index ($XNG : 494.63, +1.53, +0.3% ) lagged the rest of the sector, slipping 0.1% to 492.4 points after the Energy Department reported weekly storage data showing the nation's natural-gas supplies rose 23 billion cubic feet last week.
Arkansas-based independent Murphy Oil Corp. (MUR : 55.56, +1.51, +2.8% ) was ahead 2.2% at $55.24 a share. The company issued an interim earnings update late Wednesday that predicted results at least 7 cents a share more than Wall Street had been expecting.
Murphy Oil Corp., in an interim earnings update, said late Wednesday it expects to report first-quarter earnings of 60 cents to 65 cents a share, matching or topping the 60 cents a share it earned a year ago.
That's at least 7 cents better than the 53 cents a share analysts polled by Thomson Financial were forecasting. Murphy (MUR : 55.45, +1.40, +2.6% ) is set to release its first-quarter report after the market closes on April 25.
Murphy, based in El Dorado, Ark., said it sees oil and gas sales for the first three months of 2007 averaging the equivalent of 94,000 barrels a day, down from 98,074 bpd reported for the year-ago quarter.
Murphy estimated total exploration costs for the quarter at $5 million to $19 million, down from $63.2 million a year earlier.
Downstream operations - refining and marketing - are seen yielding income of $40 million to $45 million for the quarter ended March 31. The company lost $37.3 million on refining and marketing a year earlier, primarily due to a prolonged outage at its 125,000 bpd Meraux refinery in Louisiana, which was severely damaged by Hurricane Katrina in 2005.
The company estimated corporate charges this past quarter of $13 million, up from $10.4 million a year ago.
Earlier this week, Lehman Brothers analyst Paul Cheng downgraded Murphy Oil to equal weight from overweight, saying the company's share price was trading at a 20% premium to its fair market value, which he put at $45 a share, Cheng also raised concerns over the company's drop in proven reserves this past year and rising exploration costs, a factor hitting bottom lines across the entire independent oil company sector. Murphy shares closed Wednesday at $54.05, a 9-cent gain for the day. For the year, Murphy shares are up 6.1%, outpacing a 4.9% advance by the Amex Oil Index ($XOI : 1,255.81, +8.42, +0.7% ) over the same period.
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