NEW YORK (MarketWatch) - The worst U.S. monthly job loss in 34 years stoked further selling in the energy sector Friday, with shares of natural gas producers leading losses in a sector rocked by a stream of bad economic news, predictions of $25 a barrel oil and steep losses in the broad market.
With U.S. retail gasoline prices falling to $1.77 a gallon and crude futures retreating toward the $40 mark, investors have had little reason to dive into shares of crude oil and natural gas producers, not to mention oil refiners and drilling companies.
On Friday, the U.S. reported a loss of 533,000 jobs the biggest drop since 1974, with an overall employment rate rising to 6.7%.
Others are calling on oil to trade as low as $25 a share if the world economy continues to weaken in China, Merrill Lynch commodities analyst Francisco Blanch noted this week.
In the oil service sector, Tudor Pickering Holt on Friday noted it expects U.S. rig counts among drillers to continue to fall.
Citing "multiple anecdotes from operating-level folks," the Houston-based research firm is now forecasting "meaningful rig laydowns / rig count declines in coming few weeks."
Crude futures slid another 3% to the $42 a barrel level on the drum beat of bad economic news. See Futures Movers.
Against this back drop, the Amex Oil Index fell 1.5% to 831. The Philadelphia Oil Service Index ) rose 2.3% to 102. The Amex Natural Gas Index ) dropped 4.3% to 332.
Among energy stocks in the spotlight, PetroChina ) rose 29 cents to $79.09. Sinopec fell 13 cents to $60.03.The Chinese government is moving ahead with plans to boost taxes on gasoline by fivefold. See full story.
The Globe & Mail reported that Canadian oil and gas firm Nexen may sell overseas units in Yemen and elsewhere to defend against takeover bids. Shares of Nexen dipped 2% to $15.
Energy stocks down sharply for the week
The Amex Oil Index closed Thursday at 844, down 124 points, or 13% from its close of 968 from its ending point on Nov. 28. The gauge of leading integrated oil giant remains above its 52-week low of 745 on Oct. 10.
The Philadelphia Oil Service Index ended at 104 on Thursday, down 34 points, or 25% from its close of 138 on Nov. 28.
The Amex Natural Gas Index ended at 337 down 72 points, or 18% from its ending point of 409 a week ago.
