Energy shares mixed as natural gas rises. Energy shares traded mixed as oil price dipped from historic highs Friday, with natural gas stocks moving up, even as oil service stocks gave back recent gains. Crude-oil prices dipped below their historic close of $80.09 a barrel set during the previous session, even as natural gas price rallied on
The Energy Department reported that for the week ended Sept. 7, natural-gas inventories rose 64 billion cubic feet to 3.069 trillion cubic feet. While these levels match the year-ago, they are 260 billion cubic feet above the five-year average.
The Energy Department reported that for the week ended Sept. 7, natural-gas inventories rose 64 billion cubic feet to 3.069 trillion cubic feet. While these levels match the year-ago, they are 260 billion cubic feet above the five-year average.
The Amex Natural Gas Index (XNG:501.35, +2.08, +0.4%) rose 0.7% to 503. Components Noble Corp. (NE:48.02, -0.34, -0.7%) and XTO Energy (XTO:60.41, +0.91, +1.5%) both rose 1.6%. Natural gas futures rose about 5%, or 34 cents, to $6.37.
The Amex Oil Index (XOI:1,405.23, -5.83, -0.4%) rose fractionally to 1,411. Crude futures fell 37 cents to $79.72 a barrel, below their historic high of $80.09.
The Philadelphia Oil Service Index ($OSX:282.29, -1.03, -0.4%) fell 0.2%, giving back some recent gains.
Exco Resources (XCO:16.18, -0.06, -0.4%) rose 4 cents to $16.28 after the company filed a $1.7 billion initial public offering for its Exco Partners LP. It'll be the richest energy-related master limited partnership in U.S. history.
Shares of Valero Energy (VLO:69.12, +0.40, +0.6%) rose 80 cents to $69.26. Valero spokesman Bill Day said power had been restored at the company's Port Arthur refinery after Hurricane Humberto struck Thursday, but the facility has yet to be re-started.
Analysts said energy markets are still nervous about the potential for disruptions in refineries as the U.S. moves through the peak of the Atlantic hurricane season. Humberto gathered strength in the Gulf of Mexico in a matter of hours between Wednesday evening and Thursday morning before coming ashore.
Meanwhile, the National Hurricane Center said Tropical Storm Ingrid was centered about 840 miles east of the Lesser Antilles.
Also in the energy sector, shares of St. Mary Land & Exploration Co. (SM:35.17, -0.42, -1.2%) fell 9 cents to $35.50. The company said that it plans to sell 74 billion cubic feet equivalent of proved oil and gas reserves and also plans to buy back a little more than 5.2 million shares.
Shell's (RDSA:81.47, -0.72, -0.9%) Motiva refinery, jointly owned with Saudi Aramco, was also hit by a power failure.
OPEC holds oil demand view
The Organization of Petroleum Exporting Countries kept its oil demand growth view unchanged in its September report, saying it still sees growth of 1.3 million barrels of oil a day in 2007 and in 2008.
Despite a rather benign forecast, traders were mindful of Humberto's rapid rise this past week, springing to a full-blown hurricane in near record time before slamming into the Texas coast early Thursday.
"Weather remains unsettled just as we enter the 'sweet spot' of the hurricane season, and the markets are still nervous about refinery disruptions," said Edward Meir, analyst at MF Global, in a research note. "Dips, while likely at this stage, should therefore remain relatively shallow, as supply and weather issues dominate."
The impact from Humberto, though of no consequence to offshore production, was still being felt in the refining business. Valero Energy Corp. (VLO:69.09, +0.37, +0.5%) said it was in the process of restarting its big 325,000 barrel-per-day refinery in Port Arthur, which was hit by a widespread power outage across much of southeast Texas.
Shell's (RDSA:81.47, -0.72, -0.9%) Motiva refinery, jointly owned with Saudi Aramco, was also hit by a power failure.
Those closures added to already heightened concerns over fuel supplies, fanned by the Energy Department's report on Wednesday that U.S. refining capacity fell to 90% from 92% the previous week -- with no storms to blame for the drop. The October contract for reformulated gasoline was up 1 cent at $2.0564 a gallon while the October heating oil contract was up 0.39 cent at $2.2229 a gallon. Natural-gas futures, which fell 6.4% in the previous session, were last up 5.6% at $6.37 per million British thermal units.
OPEC holds oil demand view
The Organization of Petroleum Exporting Countries kept its oil demand growth view unchanged in its September report, saying it still sees growth of 1.3 million barrels of oil a day in 2007 and in 2008.
"It is still too early to gauge the full impact of recent developments, as events are still unfolding. The large uncertainties surrounding both non-OPEC supply and world oil demand result in even larger uncertainties on the demand for OPEC crude," OPEC said.
Meir of MF Global said there are no bearish triggers right now that could prompt substantial long liquidation.
"The demand variable, which could ultimately prove to be the Achilles' heel for this current run, has yet to manifest itself with any degree of conviction, although we think it ultimately will, especially if the U.S. economy continues to weaken," Meir said.
Via| MarketWatch|by Steve Gelsi, Jim Jelter an Polya Lesova
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