Oil stocks opened higher Monday, extending steep gains made late last week with an early boost from crude-oil prices and a couple of brokerage upgrades.
Initial trades sent the Amex Oil Index (XOI :1,369.99, +21.05, +1.6% ) and Amex Natural Gas Index (XNG : 519.52, +8.57, +1.7% ) 1% higher -- both new all-time highs -- while the Philadelphia Oil Services Index ($OSX : 255.40, +3.37, +1.3% ) lagged the pack, down 0.1%.
"Just another boring all-time high. Owning energy names is more fun than 'Shrek The Third,' so investors in mode of 'letting it happen' as valuation is not outrageous and commodities are supportive (for now)," said analyst Dan Pickering at Pickering Energy, in a pre-market note.
June crude prices moved as high as $65.38 a barrel in overnight trade, helping set the bullish tone for the market. But the contract was unable to hold the advance, slipping in the floor trading part of the session to $64.74, a 20-cent retreat. See Futures Movers.
Valero Energy Corp. (VLO :76.34, +2.37, +3.2% ) was leading percentage gainers in the oil group, up as much as 2.2% on an upgrade to buy from Goldman Sachs. Refiners also were getting a boost from gasoline prices, which are now averaging a record-high $3.20 a gallon nationwide for regular unleaded, according to the AAA Daily Fuel Gauge.
Industry analysts see little in near-term market fundamentals to change gasoline's course, with demand at the pump continuing to grow and refinery output still below where it usually is this time of year due to lengthy repair and maintenance outages at several key facilities. BP Plc (BP :69.80, +0.90, +1.3% ) was also among the top gainers, up 1% on an upgrade to buy from ING Financial.
Williams Cos. (WMB :31.30, +2.35, +8.1% ) was way out front in the gas group, up 6.6% at $30.87 on news it has sold its power generation business to Bear Stearns (BSC :151.80, +2.23, +1.5% ) for $512 million.
Blogalaxia Tags: Valero,ING,oil
