eNergy Stocks: Oil and gas stocks caught their stride midday Wednesday

Oil and gas stocks caught their stride midday Wednesday, making solid gains as rising crude-oil prices helped the sector shake off early pressures from a China-inspired pullback in the broad market.

After tipping lower in opening trades, the Amex Oil Index (XOI: 1,370.63, +22.20, +1.6% ) was firmly in the green, up 0.9% at 1,361 points. The move recaptured all of the index's losses on Tuesday. The Amex Natural Gas Index (XNG : 0.00, 0.00, 0.0% ) was also ahead 0.9% and the Philadelphia Oil Index ($OSX : 252.22, +5.24, +2.1% ) was up 1.5%, with all of its 15 component companies showing gains.




Energy stocks extend gains
Crude oil for July delivery was up 31 cents at $63.46 a barrel on the New York Mercantile Exchange, carving back a piece of the steep $2.05 loss Tuesday that sent the contract to a three-month low.


That upward drift in oil was enough to mute damage in the sector from an early sell-off in the broader market triggered by Chinese officials' decision to triple taxes on trades on the Shanghai stock exchange in an effort to cool down one of the world's hottest stock markets.


The Dow Jones Industrial Average (.DJI :13,629.59, +108.25, +0.8% ) was also narrowly back into positive territory as investors gradually shrugged off a 6.5% drop in the Shanghai Composite index. A major tumble on the Shanghai exchange in February triggered the biggest global stock market correction seen so far this year.

Meanwhile, investors in U.S. energy stocks were shifting their attention to this week's fuel supply reports, delayed for release until Thursday to accommodate the Memorial Day holiday on Monday. Traders are predicting the Energy Information Administration will report a rise in U.S. crude inventories of about 1 million barrels. Gasoline stocks are expected to rise by 750,000 to 1.5 million barrels. See Futures Movers.

Exxon Mobil Corp. (XOM :83.74, +1.12, +1.4% ) was up 63 cents at $83.25 a share, wiping out the morning's losses. The world's biggest publicly traded oil company is hosting its annual shareholders meeting Wednesday in Dallas. More corporate intrigue at BP Plc (BP :67.32, +0.07, +0.1% ) , where the head of its refining and marketing operations, John Manzoni, is stepping down following a series of mishaps and scathing reports on the company's poor safety record.


Manzoni will be moving to the CEO job at Canadian oil company Talisman Energy (CA:TLM: news, chart, profile) by late summer. He will be replaced at BP by Iain Conn on June 1. Conn is a BP executive with responsibility for safety and operations. See full story.
BP shares traded in New York were last down 6 cents at $67.19.



Oil stocks close lower, pressured by crude
Oil stocks wrapped up the first day of a shortened work week with a loss Tuesday, as crude oil prices fell 3% to a 3-month low on easing fears of supply disruptions from Nigerian oil fields.

Downward pressure built through the first half of the session, leaving the Amex Oil Index
(XOI :1,368.91, +20.48, +1.5% ) 0.8% lower to close at 1,348 points. Occidental Petroleum Co. (OXY : 55.01, +0.94, +1.7% ) and Royal Dutch Shell Plc (RDSA : 73.79, +0.01, +0.0% ) led percentage decliners in the oil group, down 1.6% to $54.07 a share and $73.78, respectively.

Exxon Mobil Corp. (XOM : 83.66, +1.04, +1.3% ) , part of the Dow Jones Industrial Average (.DJI : 13,612.03, +90.69, +0.7% ) , shed nearly 1.1% to $82.62 a share. The company is holding its annual shareholders meeting in Dallas on Wednesday. Spain's Repsol S.A. (REP : 36.11, -0.03, -0.1% ) was the Amex Oil Index's sole gainer, up 0.4% at $36.14.

The Philadelphia Oil Service Index ($OSX : 251.98, +5.00, +2.0% ) fell 0.6% to 247 points, backing off Friday's gains. BJ Services Co. (BJS : 29.60, +0.40, +1.4% ) led decliners on a 3% drop to $29.20. Crude for July delivery tumbled $2.05 to $63.15 a barrel, a 3.1% retreat from Friday's close while July gasoline futures fell 4.4% to $2.30 a gallon as several key U.S. refineries resumed operations following repair outages. See Futures Movers.


The main pressure on crude came from suspension of a two-day strike by Nigerian oil workers after the government met their demands for higher pay and agreed to keep a state-owned majority stake in oil refineries it plans to sell. Earlier, oil prices shot higher on concerns a lengthy strike could severely curtail crude supplies flowing from Nigeria, which feed primarily European and North American refineries. See full story.


British oil giant BP Plc. (BP : 67.29, +0.04, +0.1% ) announced Tuesday it plans to return to Libya, reflecting improved relations between Britain and the Libyan government. BP also said it had signed a gas exploration deal with Libya worth at least $900 million. See full story.



BP's return to Libya would end a 33-year absence from the OPEC-member nation. Several U.S. oil companies have already resumed operations there after the government of Moammar Gadhafi agreed in 2004 to abandon its quest for nuclear and chemical weapons. BP shares traded in the U.S. finished the session with a 52-cent loss at $67.25.



The Amex Natural Gas Index (XNG :516.38, +6.69, +1.3% ) advanced 0.5% to 509.7 points, recovering quickly from a lower opening with good help from Western Refining Inc. (WNR : 48.98, +2.63, +5.7% ) . Western added 8.5% to $46.35. Western and Giant Industries Inc. (GI :77.00, -0.09, -0.1% ) said a federal court in New Mexico denied the Federal Trade Commission's request for a preliminary injunction against the companies' proposed $1.4 billion merger. El Paso, Texas-based Western said it believes the commission will appeal the ruling and seek an injunction to block the deal. Unless a court ruling halts the transaction, Western and Giant said they expect to close the deal Thursday afternoon. Western agreed last November to buy Giant for $77 a share. Giant Industries shares rose 1.2% to $77.09. Pogo Producing Co. (PPP :53.96, +0.66, +1.2% ) also gave a boost the gas index, up 2.4% to $53.30 a share on news it sold its Canadian subsidiary Northrock Resources to Abu Dhabi National Energy Co. for $2 billion. See full story.



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