Energy shares resumed their slide Thursday on bearish economic data and a 300-point drop by the Dow Jones Industrial Average, after wiping out positive moves early in the session.
Natural gas and oil services shares led decliners among energy stocks, after the Federal Reserve Bank of Philadelphia reported its index of manufacturing activity in the region contracted sharply in January to its lowest level since October 2001. Crude oil futures fell 71 cents to end at $90.13, a five-week low, after Fed Chairman Ben Bernanke testified before U.S. Congress on options for a U.S. economic stimulus plan.
The Amex Oil Index (XOI:1,335.64, -46.38, -3.4%) fell more than 3% to 1,336, with sector leader Exxon Mobil (XOM:83.91, -2.62, -3.0%) subtracting 3% to $83.91. Tesoro (TSO:35.88, -0.14, -0.4%) edged up earlier in the session, only to fall 14 cents to $35.88 despite an upgrade to outperform from market perform at BMO Capital. Marathon Oil (MRO:47.73, -2.72, -5.4%) dropped 5.4% to $47.73 as the laggard in the group.
The Philadelphia Oil Service Index ($OSX:262.98, -11.88, -4.3%) declined nearly 5% to 262. Schlumberger (SLB:82.51, -3.39, -3.9%) shed 4% to $82.51, ahead of its earnings report on Friday. National Oilwell Varco (NOV:60.03, -4.11, -6.4%) subtracted 6.4% to $60.03. Exterran Holdings (EXH:66.86, -6.14, -8.4%) led decliners, dropping 8.4% to $66.86. The Amex Natural Gas Index (XNG:528.44, -24.19, -4.4%) fell 4.4% to 528 after fresh data showing inventories fell 59 billion cubic feet for the week ended Jan 11, close to the estimate for a draw of 62 billion cubic feet. Meanwhile, Peter Davies, special economic advisor to BP (BP:64.45, -1.47, -2.2%) , said he sees no impending oil shortage, in contrast to the popular peak oil theory about looming limits in supply.
The red ink flowed even with companies that issued positive news. Among movers from the sector, Bill Barrett (BBG:41.57, -0.13, -0.3%) dipped 13 cents to $41.57 after it said it'll boost its capital expenditures to a maximum of $600 million in 2008, up from $438 million in 2007. The Denver firm also announced a 30% increase in proven reserves to 558 billion cubic feet equivalent (Bcfe). It also boosted its 2008 production target by 20% to 70-77 Bcfe.
Chicago Bridge & Iron (CBI:44.10, -1.78, -3.9%) fell 3.8% to $44.10 after it was awarded a $285 million contract for a U.S. refinery-expansion project. The work to be performed by the Woodlands, Texas-based engineering and construction contractor includes procurement and modular fabrication of a sulfur recovery and hydrogen complex.
Kinder Morgan Energy Partners L.P. (KMP:55.88, +0.07, +0.1%) rose 7 cents to $55.88 after it reported fourth-quarter net earnings of $293.3 million, or 50 cents a share, compared with $267.3 million, or 64 cents, in the year-ago period. The company increased its quarterly cash dividend per common share to 92 cents from 88 cents, payable on Feb. 14.
Spectra Energy Corp. (SE:24.43, -0.85, -3.4%) fell 3.4% to $24.43 after it said it expects to exceed its previously forecast 2007 earnings of $1.40 a share. The Houston energy company reaffirmed its previously announced 2008 target of $1.56 a share, 11% higher than for 2007.
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