Bearish crude-oil supply data and waning concerns over recent supply disruptions in Nigeria held oil and natural gas stocks to modest gains Wednesday, with the sector unable to keep pace with the 103-point rally in the broader market.
At the close, the Amex Oil Index (XOI :1,305.78, +4.70, +0.4% ) had posted a 0.4% advance to 1,305.8 points, fading from early highs with a big dip in the middle of the day, while the Amex Natural Gas Index (XNG :497.29, +1.41, +0.3% ) rose 0.3% to 497.3 points. The Philadelphia Oil Service Index ($OSX : 242.85, +0.63, +0.3% ) added 0.3% to 242.9 points.
The sector got little support from the underlying energy market, where crude oil for June delivery fell 62 cents to $62.55 a barrel. See Futures Movers.
The Energy Information Administration reported that U.S. crude-oil supplies rose 1 million barrels in the week ended May 11, a fourth-consecutive weekly build.
The EIA said gasoline stocks rose 1.7 million barrels last week, more than most energy analysts had expected. The numbers took some of the upward pressure off the gasoline market, where supplies have been running about 16 million barrels below the five-year average for this time of year. Gasoline demand is also seen slowing to an annualized 1% growth from 2% to 3% earlier this year as high prices at the pump start to put the brakes on discretionary driving.
Low inventories and lofty retail prices are partly the result of a rash of unplanned refinery outages ahead of the summer driving season, which has its unofficial start on Memorial Day. But the fact that gasoline supplies are starting to build hurt refining stocks Wednesday, with Valero Energy Corp. (VLO : 72.03, -0.77, -1.1% ) leading the retreat on a 1% decline to $72.03 a share.
Investors were also reacting to news of boiler troubles at Valero's Houston refinery, which has cut daily gasoline output by about 64,000 barrels and distillates production by about 44,000 barrels. Valero said it expects to resume normal production early next week. Gainers in the integrated oil companies included ConocoPhillips (COP :71.85, +1.13, +1.6% ) , up 1.6% to $71.85, Chevron Corp. (CVX :
Exxon Mobil Corp. (XOM :81.45, +0.32, +0.4% ) , one of the 30 companies comprising the Dow Jones Industrial Average (.DJI :13,487.53, +103.69, +0.8% ) , rose 0.4% to $81.45 a share, lagging the Dow's 0.8% gain for the day.
Militant attacks and violent protests aimed at Nigeria's oil industry continued to grab headlines. Royal Dutch Shell declared force majeure on cargoes of its benchmark Bonny Light crude after protestors occupied a key oil transport facility, taking about 170,000 barrels of oil a day off the market.
Local activists reported that protestors have abandoned the facility, raising speculation among energy traders that the oil shipments could resume by the end of the week. Shell is still not estimating a restart time, however.
The protests, primarily in the oil-rich Niger River delta, aim to call attention to the extreme poverty of the region, which is also the source of most of the OPEC nation's wealth. Shares of Royal Dutch Shell (RDSA : 70.51, +0.27, +0.4% ) traded in the U.S. rose 0.4% to $70.51.
Halliburton Co. (HAL :35.59, +1.57, +4.6% ) was top performer in the Oil Services Index, adding 4.6% to $35.59 a share. The company announced it is increasing its quarterly dividend 20% to 9 cents a share, payable on June 21 to shareholders of record as of June 1.
Nabors Industries (NBR :34.90, +0.78, +2.3% ) and Schlumberger Ltd. (SLB :76.50, +0.99, +1.3% ) also managed to end in the plus column, up 2.3% and 1.3%, respectively, in an index that otherwise sawed through the session with little movement beyond 1% in either direction.
Blogalaxia Tags:Nigeria,OPEP
