MW: Energy stocks follow crude lower as Alex veers west
By Jim Jelter, MarketWatch
SAN FRANCISCO (MarketWatch) -- Oil and gas stocks fell Monday as concerns that Tropical Storm Alex might plow into the Gulf of Mexico eased, knocking the wind out of the storm's earlier threat to offshore production.
In early trade, the NYSE Arca Oil Index (XOI 920.11, -2.20, -0.24%) was off 0.3% at 919.4 points, with only three of the index's 13 components managing to hang on to gains.
BP PLC (BP 27.66, +0.64, +2.37%) was one of those gainers, leading the index with a 1.9% advance to $27.53 a share, as meteorologists predicted Alex, now churning off Mexico's Yucatan Peninsula, would likely steer clear of BP's efforts to corral its wild well 40 miles off Louisiana.
BP raised its cost of the cleanup Monday to $2.65 billion. Read more about the price of BP's cleanup.
Alex remains a potentially dangerous storm and could reach hurricane force within the next 24 hours, according to the National Hurricane Center in Miami. But with the storm veering to the west, it appears unlikely to disrupt oil and gas output from the main cluster of rigs off Louisiana.
Given the diminishing threat from Alex, oil prices fell back below $78 a barrel on the New York Mercantile Exchange. At last glance, the August futures contract was down 96 cents to $77.90 a barrel. Read more about oil prices.
Oil heads for Louisiana
Fox News reports on a massive oil slick, 20 miles from Louisiana.
The NYSE Arca Natural Gas Index (XNG 505.13, -6.75, -1.32%) fell 1.2% to 505.9 points, with all components in the red.
The Philadelphia Oil Service Sector Index (OSX 171.99, -1.22, -0.70%) slipped 0.5% to 172.4 points, with 13 of its 15 components trading lower.
Noble Corp. (NE 30.54, +1.26, +4.30%) was a notable exception, up 5.56% to $30.88 a share on word that it has bought privately held drilling company FDR Holdings for $2.16 billion in cash, a move that adds six floating drill rigs to Noble's fleet and about $2 billion worth of backlogged contracts. The move aims to curb Noble's exposure to slower drilling activities in the Gulf as a result of the BP spill.
