Energy stocks fell on the heels of a surprise increase in petroleum supplies despite gains in the broader market Wednesday, as the sector added to big losses in the previous session.
U.S. crude inventories rose for a seventh straight week, up 4.7 million barrels to an 18-month high of 350.8 million barrels in the week ended Feb. 6, the Energy Information Administration reported Wednesday. The gain was higher than the 3.4 million increase expected by analysts surveyed by energy information adviser Platts.
The Amex Oil Index fell fractionally to 929. Earlier, the index had risen 1.6%.
The Amex Natural Gas Index fell 1.6% to 387, while the Philadelphia Oil Service Index dropped 0.7% to 130.
In energy trading, crude for March delivery ended down $1.61, or 4.3%, at $35.94 a barrel on the New York Mercantile Exchange, the lowest since Jan. 15. See Futures Movers.
In its latest update, the International Energy Agency again revised lower its 2009 forecast global oil demand, this time to 84.7 million barrels a day.
The revision lower by 570,000 barrels a day would put worldwide demand down by 1.1% from 2008 levels. The IEA cited the worsening economic outlook across all regions, particularly in Europe, the former Soviet Union and Asia.
Among energy stocks in the spotlight, Anadarko Petroleum rose 1% to $39.62.
The company said it plans to spend between $4 billion and $4.5 billion on capital projects in 2009, down from about $5 billion in 2008.
"Although 2009 will be a challenging year for our industry, we feel a prudent level of funding is appropriate given the economic quality of our current portfolio," the company said. "We view our capital allocation decisions as an ongoing process, thus we will continue to closely monitor economic conditions and manage our spending to enhance shareholder value, while maintaining a strong balance sheet."
