Oil and gas stocks surged Wednesday, shaking off the previous close's losses amid a surprisingly bullish report on U.S. fuel supplies and a big 187-point rally in the broad market.
At the close, the Amex Oil Index (XOI :1,383.41, +25.88, +1.9% ) was up 1.9% at 1,383 points, with a 2.6% gain by refiner Sunoco Inc. (SUN : 81.71, +2.05, +2.6% ) to $81.71 leading the way. Five of the index's 11 components logged gains of more than 2%. Dow Jones Industrial Average (.DJI :13,482.35, +187.34, +1.4% ) component Exxon Mobil Corp. (XOM :83.35, +1.35, +1.6% ) moved up 1.7% to $83.35 a share while No. 2 Chevron Corp. rose 0.7% to $81.15.
The Amex Natural Gas Index (XNG : 516.89, +9.97, +2.0% ) advanced 2% to 516.9 points and the Philadelphia Oil Service Index ($OSX : 256.74, +7.55, +3.0% ) shot up 3% to 256.7 points, its highest close since June 5. Several oil service stocks notched gains of at least 4% Wednesday, led by Weatherford International's (WFT :55.08, +2.58, +4.9% ) 4.9% jump to $55.08 a share.
Sector rallies on supply data, broad market gains
The energy sector kicked off the rally early in the session on the latest supply data. The Energy Information Administration reported that for the week of June 8 the nation's gasoline inventories were unchanged at 201.5 million barrels, flattening out after five weeks of gains. Oil traders had expected another rise in inventories as refiners try to close the supply gap created this spring by a number of lengthy refinery outages. One disconcerting element of the report was the U.S. refinery utilization rate, which slipped last week to 89.2%. Typically, the utilization rate would be closer to 93% for this time of year.
Crude oil stocks rose 100,000 barrels last week to 342.4 million, the EIA said. The report sent the July crude-oil futures contract 91 cents higher to $66.26 a barrel on the New York Mercantile Exchange and pushed up the July gasoline contract to $2.1553 a gallon, up 1%. The contract had been dragging along at a seven-week low just prior to the data. See Futures Movers.
In Venezuela, state oil company Petroleos de Venezuela SA said Tuesday it would start paying dividends to partners on 21 oil field joint ventures over the next few weeks, Dow Jones reported from Maracaibo. The payments, to be made to such partners as Chevron and Royal Dutch Shell (RDSA :75.76, +0.86, +1.1% ) , have been delayed more than a year. Production from the 21 ventures is currently flowing about 320,000 barrels a day.
