by Jim Jelter
Oil and gas stocks shook off a slow start Monday to post solid gains, reversing Friday's sell-off as crude-oil prices resumed their upward climb.
Oil and gas stocks shook off a slow start Monday to post solid gains, reversing Friday's sell-off as crude-oil prices resumed their upward climb.
At the close, the Amex Oil Index ($XOI : 1,228.42, +12.11, +1.0% ) was up 1% at 1,228 points. The index stumbled briefly after the open as oil prices headed lower but quickly regained traction that kept it heading higher through most of the day. The Amex Natural Gas Index ($XNG :480.71, +7.22, +1.5% ) did even better, rising 1.5% to 480.7 points. Like the oil group, the gas group also didn't dwell long on a drop in the underlying commodity price, benefiting instead from a raft of earnings upgrades from Prudential.
After a slow start, the Philadelphia Oil Service Index ($OSX : 218.82, +4.19, +2.0% ) ended the day with the sector's biggest gains, up 2% to 218.8 points. Among the leaders, shares of Global Industries Ltd. (GLBL : 19.47, +1.18, +6.5% ) surged 6.5% to close at $19.47, while Weatherford International (WFT :46.42, +1.32, +2.9% ) added 2.9% to $46.42 and Noble Drilling Corp. (NE :80.71, +2.03, +2.6% ) rose 2.6% to $80.71. Crude oil for May delivery rose 7 cents to $65.94 a barrel on the New York Mercantile Exchange as tensions continued to run high between Iran and Britain over the 15 British naval personnel held by Iran. Despite a partial thaw in the rhetoric from London and Tehran, there was still no word on their possible release. They were seized over a week ago while on duty in the Mideast Gulf. See Futures Movers.
Apache Corp. (APA :71.26, +0.56, +0.8% ) , Anadarko Petroleum Corp. (APC : 43.70, +0.72, +1.7% ) , Chesapeake Energy Corp. (CHK :31.54, +0.66, +2.1% ) and Devon Energy Corp. (DVN : 70.11, +0.89, +1.3% ) all saw their 2007 and 2008 earnings outlooks upgraded Monday by Prudential.
Behind the move was an upward revision in Prudential's natural gas price forecast. The broker now estimates gas prices for the first half of 2007 will average $6.75 per thousand cubic feet, rising to $7 in the second half of the year. Prudential kept neutral ratings on all of the companies except Anadarko, which it continues to rate as a likely underperformer in the group.
In the Amex oil group, Hess Corp. (HES : 56.51, +1.04, +1.9% ) led percentage gainers with nearly a 1.9% advance to $56.51 a share. Industry giant and Dow Jones Industrials Average component Exxon Mobil Corp. rose 0.9% to $76.16 a share while Chevron Corp. (CVX : 74.83, +0.87, +1.2% ) added 1.2% to $74.83. ConocoPhillips (COP :68.19, -0.16, -0.2% ) was the only major U.S. oil company to post a decline, slipping 16 cents, or 0.2%, to close at $68.19 a share.
According to media reports, ConocoPhillips CEO Jim Mulva told reporters at the Howard Weil investor conference that rising costs will slow construction of the Fujairah refinery in the United Arab Emirates, a development that could jeopardize the company's continued participation in the project.
ConocoPhillips has already trimmed its capital spending program for 2007 and is looking for areas where it could make further cuts.
