Oil and gas stocks nosed back into positive territory Tuesday, lifted by a mildly bullish report on global oil demand from the International Energy Agency.
At midmorning, the Amex Oil Index (XOI : 1,160.42, +9.37, +0.8% ) was up 0.7%, the Amex Natural Gas Index (XNG : 455.26, +2.58, +0.6% ) rose 0.7%, and the Philadelphia Oil Service Index ($OSX : 205.95, +2.59, +1.3% ) was up 1.2%. All three of the energy-sector indexes lost ground on Monday.
Behind the move was an 89-cent advance in the price of April crude-oil futures, to $59.80 a barrel, on the New York Mercantile Exchange. Oil prices turned around on an updated report from the IEA in which the Paris-based arm of the United Nations left its global crude demand forecast unchanged at 86 million barrels a day. See Futures Movers.
The report brought some relief to energy traders who had been fretting that demand from industrialized nations might dip amid a broad economic slowdown this year.
The IEA report also forecast that the first quarter could see one of the steepest drops in available fuel inventories in a decade, in turn raising the prospect that the Organization of Petroleum Exporting Countries might have to bump up production to keep pace with demand.
OPEC's oil ministers, gathering this week in Vienna to discuss production policy, are widely expected to leave their output quotas unchanged. Investors also played off a growth forecast from Chevron Corp. (CVX : 69.50, +0.67, +1.0% ) , which said it expects average annual production to increase by at least 3% through 2010.
The nation's No. 2 oil company, holding an annual meeting in New York City, said it expects current oil and gas development projects to yield the equivalent of more than 1 million barrels of oil a day by 2011. Chevron also said exploration drilling has added more than 5 billion oil-equivalent barrels to its reserve base over the past five years.
Chevron's shares were up 65 cents at $69.47.
Meanwhile, shares of Exxon Mobil Corp. (XOM :71.49, +0.62, +0.9% ) , part of the Dow Jones Industrial Average, moved 25 cents higher at $71.12, while ConocoPhillips (COP :68.33, +1.09, +1.6% ) added 48 cents at $67.72. MarketWatch
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