NEW YORK (MarketWatch) - Investors continued their move into energy stocks despite weakness in the broad market on Thursday, as shares of oil and natural gas stocks tapped into rising commodity prices.
The Amex Oil Index rose 2.7% to 971. The Amex Natural Gas Index jumped 2.8% to 399. The Philadelphia Oil Service Index traded about flat at 125.
Pritchard Capital noted that the Philadelphia Oil Service Index has risen 21% over the past four trading days. Among oil drillers, Willbros Co. was up 32% as of Thursday's close since last Friday. National Oilwell Varco and Key Energy Services are both up 28%.
Meanwhile, oil futures rose $2 to $45.52, despite a report from the International Energy Agency that global oil demand will shrink this year for the first time in a quarter-century as rich nations fall into recession and growth slows in the developing world. See Futures Movers.
Among energy stocks in the spotlight, Marathon Oil continues to weigh whether to break out its refining business from its exploration and production operations in the wake of the challenging economic environment. Earlier, the company had expected to reach a decision by the end of the month. Shares rose 5 cents to $25.49. See full story.
EnCana Corp. cut its capital spending plans by $1.3 billion to $6.1 billion in 2009 on gas, oil-sands and refinery projects. The oil firm expects flat production, with $7.7 billion in cash flow and about $1.6 billion in free cash flow next year. Shares rose 2.5% to $47.71.
Precision Drilling Trust said it may cut or suspend its monthly cash distributions in the wake of more expensive credit needed to buy Grey Wolf Inc. but the company plans to move ahead with the deal. Shares of Precision Drilling fell 6% to $6.31. Grey Wolf shares rose 2 cents to $5.80.
