Oil and gas stocks gave up some of their recent gains Wednesday, pulled down by a drop in the broader market and a rise in U.S. supply data that roiled petroleum prices.
The Amex Oil Index (XOI :1,376.61, -20.97, -1.5% ) closed down 1.5%, deeper than its earlier loss of 1%, at 1,376.61 points. That's the lowest close for the benchmark index since Thursday.
Sunoco Inc. (SUN :80.20, -3.17, -3.8% ) led decliners, closing the day 3.8% lower at $80.20. Marathon Oil (MRO :124.99, -2.27, -1.8% ) closed 1.8% lower at $124.99, and Valero Energy Corp. (VLO :74.26, -1.76, -2.3% ) lost 2.3%. Crude for July delivery closed with a gain of 35 cents at $65.95 a barrel on the New York Mercantile Exchange after trading as low as $65.25 earlier in the day. See full story.
A report that Turkish forces had entered Iraq to search for Kurdish guerillas propped up crude oil prices. But reformulated gasoline futures closed at their lowest level in nearly a month after the Energy Dept. said gasoline supplies climbed for a fifth straight week. Oil supplies also rose and are now 0.5% higher than a year ago.
The broader U.S. stock market fell sharply Wednesday, with the Dow Jones Industrial Average (.INDU :0.00, 0.00, 0.0% ) posting a loss of more than 100 points after new economic data fueled inflation concerns. See Market Snapshot.
In other energy news, tropical Cyclone Gonu loomed near Oman in the Persian Gulf, where it's been deemed far less dangerous than earlier feared. However, oil production was suspended for the second straight day as the country evacuated 11,000 workers from the port of Sohar.
Meanwhile, the Amex Natural Gas Index (XNG :516.77, -7.65, -1.5% ) closed 1.5% lower at 516.77 points. Southwestern Energy Co. (SWN :47.45, -1.56, -3.2% ) led decliners with a drop of 3.2% to $47.45. El Paso Corp. (EP :17.01, +0.01, +0.1% ) was the only component to post a gain, climbing a penny to close at $17.01. The Philadelphia Oil Service Index ($OSX : 253.87, -4.00, -1.6% ) slipped 1.6% to 254 points. Trans Ocean (RIG :99.04, -1.06, -1.1% ) fell 1% to $99.04 despite an earnings forecast boost from FBR Research.
The research firm said it now expects 2007 Trans Ocean earnings of $7.80, from $7.75, and 2008 profit of $10.50, cut from $10.60.
"The strength is from several deepwater rigs working at market rates vs. previously signed sub-market contracts," FBR Research said.
