BP rose on plans to venture into the Canadian oil sands on Tuesday amid a surge in energy stocks on tight oil inventories and plans by OPEC to hold production steady.
The overall market also provided a big lift, with the Dow Jones Industrial Average ($DJ:13,444.96, +196.23, +1.5%) rallying nearly 200 points in midday action on strong U.S. productivity gains and private-sector hiring. Crude-oil stocks fell by 8 million barrels to 305.2 million barrels in the past week, well below the forecast for a dip of 1.7 million barrels. Crude-oil futures rose 50 cents to $88.82.
In a move to tap into what's often regarded as the largest oil reserves in the world outside Saudi Arabia, BP (BP:73.68, +1.33, +1.8%) said it will exchange half of a stake in its Toledo refinery for a half share of Husky Energy's Sunrise field in Alberta.
"BP's move into oil sands is an opportunity to build a strategic, material position and the huge potential of Sunrise is the ideal entry point for BP into Canadian oil sands," said Tony Hayward, BP's group chief executive.
BP shares rose 2.2% to $73.93. Oil sands specialists Suncor Energy (SU:100.80, +3.06, +3.1%) and Encana (ECA:65.50, +1.21, +1.9%) rose 3.3% and 2.3%, respectively. The Amex Oil Index (XOI:1,445.74, +23.02, +1.6%) rose 1.9% to 1, 450 as it outpaced the 1.4% jump in the Dow Jones Industrial Average and the gain of 1.5% by the S&P 500 ($SPX:1,485.01, +22.22, +1.5%) . Hess Corp. (HES:74.62, +2.02, +2.8%) added 3.4% to $75.04, Chevron (CVX:89.30, +2.14, +2.5%) added 2.6% to $89.44 and Exxon Mobil (XOM:288.58, +1.43, +0.5%) advanced 1.1% to 290. Standouts in the group included Weatherford , up 3.3% to $65.83, and Schlumberger (SLB:95.80, +1.96, +2.1%) , up 3.1% to $96.72.
The Amex Natural Gas Index (XNG: 551.54, +10.59, +2.0%) advanced 2% to 552. Southwestern Energy jumped 4.2% to $53.08 as a leading gainer from the gauge. ConocoPhillips (COP:81.36, +1.66, +2.1%) added 2.3% to $81.55. The oil giant said Alaska may select the builder of a pipeline system to transport natural gas from the North Slope to the lower 48 states by June 2008, according to reports. Last week, ConocoPhillips proposed a $30 billion pipeline to link deposits in the North Slope to the lower 48 states and Canada.
Hercules Offshore (HERO: 23.65, +0.21, +0.9%) rose 2.7% to $24.07 after it announced two new three-year drilling contracts for operations in India. The contracts are expected to generate $156 million in revenue per year.
Teekay LNG Partners LP rose 1.1% to $30.25 after Citi Investment Research upgraded the company to buy from hold.
"Our upgrade is essentially a valuation call and is driven by the nearly 11% drop in unit prices since early November despite fundamentals remaining unchanged," Citi said.
Via: MarketWatch|by Steve Gelsi
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