eNergy STOCKS: The stocks fell off solid opening gains Thursday, as crude's blistering charge to $77 a barrel sputtered.

Sector surrenders early gains on crude pullback| Just after midday, the Amex Oil Index (XOI:1,399.13, +10.55, +0.8%) was up a mere 0.1% at 1,390 points, with Occidental Petroleum Corp. (OXY:59.12, +1.00, +1.7%) leading the group on a 1.1% advance to $58.81 a share, about half of its earlier gains.

Sector surrenders early gains on crude pullback| Just after midday, the Amex Oil Index (XOI:1,399.13, +10.55, +0.8%) was up a mere 0.1% at 1,390 points, with Occidental Petroleum Corp. (OXY:59.12, +1.00, +1.7%) leading the group on a 1.1% advance to $58.81 a share, about half of its earlier gains. The sector got a big lift early in the session from the New York Mercantile Exchange, where the October crude-oil futures briefly sailed past $77 a barrel to $77.43, its highest level in more than a month. A fresh set of weekly fuel supply data from the Energy Department showed U.S. crude and gasoline inventories fell last week, helping support the sector. But the October contract gave back most of the advance, slipping to $75.78, a 5-cent gain, as traders mulled the data. Meanwhile, the Amex Natural Gas Index (XNG:494.17, +3.77, +0.8%) was last ahead 0.3% at 492 points, slipping from its opening high of 496. The Energy Department reported that natural-gas inventories rose 36 billion cubic feet for the week ended Aug. 31, less than many analysts expected. Supplies nevertheless stand at 284 billion cubic feet above the five-year average for this time of year. Swelling supplies and low prices were central to Chesapeake Energy Corp.'s (CHK:33.94, +0.05, +0.1%) decision this week to throttle back production and lower its capital spending on exploration and production, choosing instead to leave resources in the ground and wait for better prices. Chesapeake's move weighed on oil service stocks, raising fears of a further slowdown in drilling for gas in North America. By early afternoon, the Philadelphia Oil Service Index ($OSX:282.55, +1.36, +0.5%) was up 0.3% at 282 points, also off its morning highs. Giant offshore rig owner Transocean Inc. (RIG:106.90, -0.60, -0.6%) was down 95 cents, or 0.9%, a share at $106.55, among the oil service group's biggest decliners. The company, in its September fleet update, reported slightly higher downtime for its rigs than Wall Street had expected, prompting some analysts to trim their third-quarter earnings forecast. Analysts, on average, are looking for Transocean to post third-quarter earnings of $2.03 a share. Credit Suisse, however, cut its estimate to $1.87 a share following the latest fleet report.The sector got a big lift early in the session from the New York Mercantile Exchange, where the October crude-oil futures briefly sailed past $77 a barrel to $77.43, its highest level in more than a month. A fresh set of weekly fuel supply data from the Energy Department showed U.S. crude and gasoline inventories fell last week, helping support the sector.

But the October contract gave back most of the advance, slipping to $75.78, a 5-cent gain, as traders mulled the data. Meanwhile, the Amex Natural Gas Index (XNG:494.17, +3.77, +0.8%) was last ahead 0.3% at 492 points, slipping from its opening high of 496.
The Energy Department reported that natural-gas inventories rose 36 billion cubic feet for the week ended Aug. 31, less than many analysts expected. Supplies nevertheless stand at 284 billion cubic feet above the five-year average for this time of year.
Swelling supplies and low prices were central to Chesapeake Energy Corp.'s (CHK:33.94, +0.05, +0.1%) decision this week to throttle back production and lower its capital spending on exploration and production, choosing instead to leave resources in the ground and wait for better prices.
Chesapeake's move weighed on oil service stocks, raising fears of a further slowdown in drilling for gas in North America. By early afternoon, the Philadelphia Oil Service Index ($OSX:282.55, +1.36, +0.5%) was up 0.3% at 282 points, also off its morning highs. Giant offshore rig owner Transocean Inc. (RIG:106.90, -0.60, -0.6%) was down 95 cents, or 0.9%, a share at $106.55, among the oil service group's biggest decliners. The company, in its September fleet update, reported slightly higher downtime for its rigs than Wall Street had expected, prompting some analysts to trim their third-quarter earnings forecast.
Analysts, on average, are looking for Transocean to post third-quarter earnings of $2.03 a share. Credit Suisse, however, cut its estimate to $1.87 a share following the latest fleet report.


Via: Market Watch
by Jim Jelter
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