MW: Energy sector plays off Wall Street's pullback, lower oil
By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) -- Energy stocks rose from their lows of the session to trade mixed as gasoline supplies fell and ConocoPhillips rose on plans to buy back $5 billion in stock.
The NYSE Arca Oil Index (XOI 1,072, -6.10, -0.65%) fell 0.5% to 1,073, while the NYSE Arca Natural Gas Index (XNG 538.51, +0.03, +0.01%) rose 0.1% to 539 and the Philadelphia Oil Service Index (OSX 204.89, +0.01, +0.00%) rose 0.2% to 205.
Oil for May delivery, the most actively traded contract, fell $1.26, or 1.5%, at $80.63 a barrel after the U.S. Energy Information Administration showed crude oil inventories rose by 7.245 million barrels last week, while analysts polled by Platts expected crude stocks up 1.67 million barrels. See Futures Movers.
However, gasoline stockpiles declined by 2.7 million barrels, exceeding the analyst target of 1.88 million barrels.
The thirst for gasoline helped propel shares of refiner Valero (VLO 20.54, +0.24, +1.17%) up by 1.2% to $20.55.
More broadly, the Dow Jones Industrial Average (INDU 10,873, -15.80, -0.15%) fell 20 points, but came off its weakest levels.
Shares of ConocoPhillips (COP 52.70, +0.19, +0.36%) moved in a narrow range, recovering early losses. The oil major confirmed plans to sell about $5 billion worth of its Lukoil stake and channel the money into stock buybacks.
Management also that said the company's move to shed exploration and production properties will cut into output growth in coming years but that it'll emerge as a company focused on fresh energy prospects and less on refining. See full story.
Also in the spotlight, Royal Dutch Shell (RDS.A 57.70, -0.99, -1.69%) and China National Petroleum Corp. set plans to develop and produce natural gas in China's Sichuan basin. It's Shell's second gas business in China.
U.S.-listed shares of Royal Dutch Shell dropped 1.7% to $57.71.
Meanwhile, J.P. Morgan on Wednesday upgraded Consol Energy (CNX 46.00, +1.13, +2.52%) to overweight from neutral. Analysts said the stock's drop following its plan to buy from Dominion Resources (D 40.20, +0.01, +0.03%) its Appalachian E&P business gives investors a good buying opportunity.
"After its sharp fall relative to the coal sector following the Dominion announcement, we believe Consol is showing value," J.P. Morgan analysts said. Shares of Consol Energy rose 2.7% to $46.07.
