[ENERGY STOCKS] ExxonMobil shareholders meet

Energy stocks dipped on Wednesday as oil prices cooled off, with petroleum and natural gas shares extending losses for the second straight day this week.

The Amex Oil Index (XOI: 1,562.75, -2.98, -0.2%) subtracted 0.8% to 1,553, with Hess Corp. (HES: 121.79, -4.21, -3.3%) down 3% to $122.10 and Valero Energy (VLO: 49.00, +1.53, +3.2%) gaining 3.5% to $49.14.

The Amex Natural Gas Index (XNG: 705.71, -0.64, -0.1%) fell 0.8% to 701. Component Chesapeake Energy (CHK: 51.99, -1.20, -2.3%) dropped 2.5% to $51.85. Southwestern Energy (SWN: 44.18, +0.35, +0.8%) rose nearly 2% to $44.69.

The Philadelphia Oil Service Index ($OSX: 337.84, +0.89, +0.3%) dropped 0.9% to 334, falling back from gains in the previous session. Component Halliburton (HAL: 47.88, -0.24, -0.5%) dropped 1.5% to $47.38. Schlumberger (SLB: 100.69, -0.34, -0.3%) fell 1.7% to $99.34. Crude oil prices subtracted $1.48 to $127.37 on the heels of a slack Memorial Day driving weekend in the U.S. See Futures Movers. Even so, gasoline prices remained at the record level of $3.94 a gallon for the second day, according to the AAA Daily Fuel Gauge Report.

Among stocks in the spotlight, ExxonMobil (XOM: 89.65, -0.15, -0.2%) fell 31 cents to $89.49 ahead of its annual shareholders meeting. Some shareholders are calling for the separation of its chairman and chief executive officer and for the oil giant to spend more of its billions on alternative energy research.

Chairman and CEO Rex Tillerson currently holds both jobs. The company's management opposes the measures, which are non-binding. Descendants of John D. Rockefeller, the founder of ExxonMobil predecessor Standard Oil Corp., and a variety of institutional investors in the U.S. and abroad have lined up behind the separation proposal, which drew the support of 40% of shareholders at last year's meeting.

PEMEX's E&P subsidiary has awarded Baker Hughes' (BHI: 87.94, +0.46, +0.5%) a $469 million contract to drill and complete wells, according to federal procurement Website cited by a research note Wednesday by Pritchard Capital Partners. The fields are all in the Gulf of Mexico off the coast of Tabasco state. Work is due to begin on June 30 and run nearly two years. Baker Hughes fell 0.8% to $86.70.

Frontier Oil (FTO: 29.83, +0.89, +3.1%) rose nearly 5% to $30.30. The company drew an upgrade to peer perform from underperform at Bear Stearns. Basic Energy Services (BAS: 28.12, -0.55, -1.9%) dropped 2.4% to $27.97. The company was downgraded to neutral from buy at UBS.

In the alternative energy arena, Verenium Corp. (VRNM: 2.40, +0.03, +1.3%) said it'll hold a dedication ceremony on Thursday for its demonstration plant in Jennings, La. The demonstration plant is rated to produce 1.4 million gallons of ethanol per year using enzymes to convert non-food biomass into fuel. The Cambridge, Mass. company said it's on track to begin construction in the middle of next year on a 30 million gallon per year commercial plant, which will be the first of its kind. Shares rose 2% to $2.42.

Source: MarketWatch|by Steve Gelsi

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