Oil and gas shares opened with a thud Monday as commodity prices declined on forecasts for warmer weather in the northeastern U.S.
The Amex Oil Index (XOI :1,147.68, -14.53, -1.3% ) fell 1.1% in early trade as crude for March delivery dropped $1.69 to $57.70 a barrel. The Amex Natural Gas Index (XNG :454.05, -3.84, -0.8% ) was off 0.8% to 454.45 points as natural gas lost 2.8% to $7.29 per million British thermal units. The Philadelphia Oil Service Index ($OSX :193.21, -2.99, -1.5% ) lopped off 1.5% to 193.34 points.
Temperatures in the northeastern U.S. are expected to warm up this week and to be slightly above normal for the time of year in some areas. See full story.
"Prices have pulled back significantly, particularly heating oil, as weather remains the primary focus," said Mike Fitzpatrick, senior analyst at Fimat USA, in emailed comments. On the oil index, ten out of eleven components were in the red with Sunoco Inc. (SUN :62.23, +0.45, +0.7% ) the sole gainer, rising 0.6% to $62.18. Deutsche Bank upgraded the Philadelphia-based oil company's shares to buy on rising East Coast margins.
Hess Corp. (HES :53.33, -0.94, -1.7% ) , which is often described as the company most closely leveraged to oil prices, led the index's decline, falling 1.9% to $53.24. Among the majors, Exxon Mobil Corp. (XOM : 74.50, -0.79, -1.0% ) fell 1.2% to $74.36, while Chevron Corp. (CVX : 70.46, -0.35, -0.5% ) slipped 0.8% to $70.24.
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