Energy stocks spiked upward on a surprise drawdown in natural gas supplies on Thursday, on top of surges tied to oil topping $50 a barrel for the first time in months.
The U.S. Energy Information Administration said natural gas supplies fell by 30 billion cubic feet, slightly above the target of 28 billion cubic feet, but enough to spark a rally in down beaten natural gas prices and equities tied to that business. The Amex Oil Index rose 3.6% to 899. Leading component Exxon Mobil dipped 0.6% to $68.73. Chevron moved up 1.7% to $67.70. Both companies are components of the 30-stock Dow Jones Industrial Average which dropped 85 points after gains in previous sessions.
The Amex Natural Gas Index rose 4.3% to 369. Component Nicor each jumped 6% at midday.
The Philadelphia Oil Service Index led the energy sector with a rise of 5% to 136. Component Nabors Industries rallied 10% to $11.
Oil prices jumped $2.74 to $50.88 amid jitters that the U.S. Federal Reserve's latest capital injection into the banking system could foster inflation down the road. See full story.
Bulls remained in the energy sector for the second straight day. Oil and natural gas stocks staged a turnaround in the previous session after the Fed announced its surprise plan to buy U.S. bonds and other debt in a move that is expected to cause mortgage interest rates to fall.
Among energy stocks in the spotlight, Pioneer Natural Resources rose 9% to $17.80 after it reached a deal to reduce its board of directors to 10 seats from 11 with its largest shareholder, Southeastern Asset Management Inc.
