Oil stocks end on a whimper as crude falls. Oil and gas stocks ended a week of solid gains with a whimper Friday, pressured by a 2% drop in crude-oil and natural gas futures. Trading action was further tempered by investors' reluctance to place any big bets ahead of the Federal Reserve's meeting on Tuesday in case a widely anticipated rate cut does not materialize.
At the close, the Amex Oil Index (XOI:1,478.82, +0.44, +0.0%) managed a gain of less than 0.1% to end at 1,478.82 points, preserving a 3.4% advance for the week. January crude-oil futures tumbled $1.95 to $88.28 a barrel on the New York Mercantile Exchange, falling a low as $87.07 during the session as traders fretted over a surprisingly strong U.S. jobs report and how that might be read by the Fed. A jump in hiring is seen on Wall Street as a possible threat to a cut in federal lending rates.
Among the day's biggest movers, Marathon Oil Corp. (MRO:59.23, +0.68, +1.2%) made the most headway in the oil group, rising 1.3% to $59.23 a share, followed closely by refiner Sunoco Inc. , up 1.2% to $65.20. France's Total S.A. (TOT:82.83, -0.86, -1.0%) led percentage decliners, on the index, slipping 1% to $82.83.
Exxon Mobil Corp. (XOM:91.50, +0.06, +0.1%) closed 6 cents higher at $91.50 and Chevron Corp. fell 42 cents, or 0.5%, to $90.96. ConocoPhillips (COP:83.30, +0.05, +0.1%) ended the day unchanged at $83.30 after announcing it would raise its overall capital spending program in 2008 by 13% to $15.3 billion.
The Amex Natural Gas Index (XNG:564.15, -1.22, -0.2%) ended 0.2% lower at 564.15 points, logging a 4.6% gain for the week. Nicor Inc. lead the gas group's decliners on a 1.4% drop to $44.44, with most of the other issues in the index muddling through the session within one percentage point of where they opened.
Meanwhile, the Philadelphia Oil Service Index ($OSX:296.31, -1.58, -0.5%) closed 0.5% lower at 296.3 points, up 4.3% from a week ago. Weatherford International (WFT:65.65, -1.48, -2.2%) gave up 2.2% to $65.65.
Cameron International (CAM:98.68, -0.77, -0.8%) fell 60 cents to $98.85 after the company set a 2-for-1 stock split and said it plans to buy back $400 million in stock. Stephen Leeb, fund manager of Leeb Capital Management (LCMFX:12.13, -0.03, -0.2%) , said oil services stock remain attractive based on price-to-earnings ratios for the group. "They're all cheap, with multiples toward the low end," he said in an interview with MarketWatch.
Transocean (RIG:135.07, +0.97, +0.7%) , Schlumberger (SLB:97.19, -1.70, -1.7%) and Diamond Offshore (DO:125.30, -0.02, 0.0%) ranked as among his favorites right now, as drilling rates go up, backlogs rise and oil production becomes more expensive in a world where oil may hit $120 a barrel next year, he said.
Meanwhile, Petrobras (PBR:106.71, +0.03, +0.0%) shares rose 3 cents to $106.71 after the state-owned energy producer announced it found more oil and natural gas off the coast of Espirito Santo state and close to the existing Camarupim gas field.
Via: MarketWatch| by Steve Gelsi
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