Independents pace sector gains; Chesapeake sits out rally
By Jim Jelter, MarketWatch
SAN FRANCISCO (MarketWatch) — Oil and natural-gas stocks moved sharply higher Thursday, buoyed by crude oil’s leap past $97 a barrel and a 200-point rally for the Dow Jones Industrial Average.
The broad-based equities rally on Wall Street followed comments by European Central Bank President Mario Draghi, who said the region’s policy makers had agreed to buy as many government bonds as needed to bring under control Europe’s sovereign-debt crisis and rebuild confidence in the euro. Read more about Draghi’s strategy for ECB bond purchases.
The Dow DJIA +1.81% added more than 200 points at late morning. Read more in Market Snapshot.
Steps toward taming Europe’s debt crisis are seen as key to reviving the region’s economy and with it, demand for energy.
October crude-oil futures CLV2 +1.79% jumped as much as $1.88 to $97.25 a barrel on the New York Mercantile Exchange. Crude also got a boost from a steeper drop than expected in U.S. inventories last week stemming from production cuts associated with Hurricane Isaac. See the latest on oil and gas prices.
The NYSE Arca Oil Index rose 1.8% to 1,233 points on the move, in which the biggest lift was among shares of independent oil producers. Marathon Oil Corp. MRO +4.12% jumped 3.5%, while Hess Corp. HES +3.41% rose 3.1% to lead percentage gainers in the group.
U.S.-listed shares of France’s Total SA TOT +3.23% also benefited from the euro-centric rally, up 2.9% at $50.90.
While also trading higher, shares of gas companies lacked some of the enthusiasm. The NYSE Arca Natural Gas Index XX:XNG +2.18% was ahead 1.6% at 647.9 points, with all but one of its components — Chesapeake Energy CHK +0.15% — rising.
Chesapeake’s shares lost 0.9% to $19.37, pulling back after the company updated investors on its planned asset sales. The presentation was apparently a bit short on new deals.
According to the company, it still plans to sell its Permian Basin assets in western Texas in the third quarter, part of efforts to raise $14 billion this year to ease its debt load following the big slump in prices that natural gas took earlier this year.
Chesapeake CEO Aubrey McClendon told investors he expects to have lined up $11.7 billion in asset sales by the end of the third quarter. Read about McClendon's presentation.
Also Thursday, the Philadelphia Oil Service Sector Index OSX +2.07% moved 2.2% higher to stand at 225.7 points, with shares of Nabors Industries NBR +3.81% leading the charge, up 3.5% at $15.21.
Jim Jelter is Industrials Editor for MarketWatch in San Francisco.
