Meanwhile, the Philadelphia Oil Service Index charged ahead 2.3% to 274.5 points and the Amex Natural Gas Index was up 1.5% at 478, with both indexes down slightly from early session highs.
Behind Friday's upswing an enthusiastic response by Wall Street to separate speeches by Federal Reserve Chairman Ben Bernanke and President George W. Bush that assured investors the government is prepared to take steps to stem the growing number of mortgage defaults and bring some relief to the hard-pressed credit market.
Energy stocks, like the rest of the equities market, were also reacting to tame July inflation data, which is seen by many analysts as increasing the likelihood of another rate cut by the Federal Reserve when it meets on Sept. 18.
Baker Hughes , in its weekly rig activity report, said the number of rigs drilling for oil and gas in North America fell by one to 2,134. While that was 97 more than were working in the U.S. a year ago, the total fell a whopping 200 in Canada.
In the alternative fuel sector, UBS cut target prices and earnings estimates on ethanol producers Verasun Energy Corp., US Bioenergy Corp. and Aventine Renewable Energy , citing concerns about oversupply. UBS trimmed its 2008 ethanol price forecast to $1.87 a gallon from $1.99, erasing what the broker earlier had predicted would be a 30-cent per-gallon premium over gasoline.
by Jim Jelter
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