SAN FRANCISCO (MarketWatch) -- Energy stocks pushed higher Tuesday, unhinging themselves from weaker commodity prices to join a broad equities market rally ahead of the final session of 2008.
Despite the ninth-inning rally, the energy sector's major indexes are on course to close out the year with declines of between 35% and 60%, hardly surprising in a year that has seen the worst stock market performance since the Great Depression.
The Amex Oil Index led the sector Tuesday, up 2.4% to close at 969.66 points to extend the previous session's crude-fueled gains. All 13 components racked up gains for the day, trimming the index's year-to-date loss to 37.8%.
Crude for February delivery failed to hold the $40 level it hit Monday on escalating violence between Hamas and Israel and the usual concerns over what the conflict might mean for Middle East oil supplies. At the close, the February crude contract was down 99 cents at $39.03 a barrel. See Futures Movers.
Continued weakness in the global economy was the main catalyst behind oil's retreat, with more grim economic data and U.S. consumer confidence ebbing last month to an all-time low. See full story.
ConocoPhillips reversed earlier declines to finish the session with a 1.6% gain at 370.4 points, with 12 of the index's 15 components ending in the green. It is down 35% year-to-date.
Late Monday, El Paso Corp. said its latest efforts to shed non-core assets have resulted in sales worth about $275 million and include the $20 million sale of its fuel terminal in Boston. El Paso's shares led gainers in the gas group, up 4.8% to $7.44.
The Philadelphia Oil Service Index also turned on a late-day rally, overcoming early losses to close at 120 points, a 2.1% gain. Weatherford International was the top performer, up 7% at $10.70. Year-to-date, the oil service sector has been the sector's biggest casualty of plunging oil prices. Unless something extraordinary happens in Wednesday's pre-holiday session, it will finish the year with a punishing 60% loss.
