A recovery in Asian markets overnight sparked a wave of optimism on Wall Street Tuesday, lifting the three major energy indexes.
The Amex Oil Index (XOI : 1,122.88, +14.19, +1.3% ) rose 0.7% to 1,116.81 points as crude for April delivery picked up 14 cents to $60.28 a barrel. The Amex Natural Gas Index (XNG : 446.52, +5.32, +1.2% ) rose 0.7% to 444.44 points as natural gas added 1% to $7.32 per million British thermal units. The Philadelphia Oil Service Index ($OSX : 196.64, +3.89, +2.0% ) jumped 1.5% to 195.62 points.
Since last week's sharp market decline, oil and gas equities have followed broader market movements rather than commodity prices, which have been generally higher, on the expectation that any global economic slowdown would eventually dent energy demand. Some speculate the correction has been too severe among some issues, leaving many that have been watching hungrily from the sidelines at rapidly falling stocks ready to snap.
"Mouth beginning to water as some favorites dropping too much, (Southwestern Energy Co. (SWN :37.20, +1.19, +3.3% ) at $36, Schlumberger Ltd. (SLB :63.01, +1.34, +2.2% ) at $61)" said Dan Pickering of Pickering Energy Analysts in a pre-market note to clients.
However, it seems many had the same idea and moved in quickly after the opening bell to snatch Pickering's favorites. Schlumberger was last up 1.9% to $62.84. Southwestern rose 2.5% to $36.91.
On the oil index, gains were more muted during the mid-morning session, backing off from a more exuberant open that pushed many of the stocks to climb well over 1%. Leading the advance, Valero Energy Corp. (VLO : 57.17, +1.26, +2.3% ) rose 1.7% to $56.84. French refiner Total (TOT : 64.91, +0.99, +1.5% ) climbed 1.4% to $56.84.
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