MW: Energy stocks slide with broad market, oil prices
NEW YORK (MarketWatch) -- Energy stocks fell sharply at the open as the sector tracked a dramatic sell-off in the broad market and a $4 slide in crude-oil futures toward the $60 a barrel level.
OPEC moved to cut production by 1.5 million barrels a day, a move seen as inadequate to counteract dip in demand. Oil futures fell 4.2% to $65. See Futures Movers.
Average U.S. unleaded retail gasoline prices fell 4 cents in the last day to $2.78 a barrel, according to the Fuel Gauge Report from the AAA. A month ago, gasoline sold for $3.72 a barrel and a year ago it sold for $2.82 a barrel. Gasoline peaked near $4.15 a barrel over the summer.
The Amex Oil Index shed 7% to 803, holding above lows earlier in the session. Component Exxon Mobil fell 4% to $67.62. Chevron dropped to 7.4% to $61.89.
The Amex Natural Gas Index subtracted 6%, and fell 365. Component XTO Energy fell 3.6% to $30.99.
The Philadelphia Oil Service Index gave up 7.8% to 128.
Among stocks in the spotlight, XTO Energy said it plans to reduce its debt by about $1 billion in 2009. The Fort Worth, Texas, natural-gas producer said it's hedged approximately 70% of its expected natural-gas production in 2009 at an equivalent price of $11 per million cubic feet equivalent, higher than the recent futures prices of $6.21.
"Given these hedges and the current commodity strip pricing, XTO anticipates record cash flow and production volumes with the financial strength to reduce debt," said Bob R. Simpson, chairman and chief executive officer. "With our focus on delivering performance, particularly in these challenging times, we will continue to look for opportunities to increase our hedge position."
Peabody Energy Corp. doubled the size of its buyback program to $1 billion. "We have a backdrop of record earnings, strong cash flows and ample liquidity," said chairman and chief executive officer Gregory Boyce. "The fundamentals of the business are sound, and we maintain strong capacity to continue to grow the company." Peabody has been purchasing its stock under the current plan since 2005. Shares of Peabody fell 8% to $28.03.
Barclays Capital on Friday raised its 2008 profit outlook for Noble Corp. to $5.72 a share from $5.68 a share, but trimmed its 2009 estimates by 3% to $7.05 a share from $7.30 a share. The offshore drilling firm said late Wednesday third-quarter net income rose to $382.5 million, or $1.43 a share from $318.3 million, or $1.18 a share, a year ago. Shares fell 11% to $24.58 on Thursday.
