MW: Energy stocks extend losses on bearish inventory data
By Jim Jelter, MarketWatch
SAN FRANCISCO (MarketWatch) -- Oil and gas stocks closed lower Wednesday, extending early losses on a combination of continued weak oil demand and a 26-point retreat by the Dow Jones Industrial Average.
The NYSE Arca Oil Index (XOI 1,042, -11.13, -1.06%) fell 1.1% to 1,042 points, with 12 of its 13 components finishing in the red. Early selling accelerated following the Energy Information Administration's release of the latest U.S. oil and fuel inventory data.
The EIA report showed a surprise 2.3 million-barrel rise in the nation's oil stockpiles for the week ended Jan. 29. Industry analysts had predicted a decline of about a million barrels. The report sent the March crude oil futures contract 25 cents lower to $76.98 a barrel on the New York Mercantile Exchange.
Refiner Sunoco Inc. (SUN 26.49, -0.81, -2.97%) led decliners in the group, down nearly 3% to $26.49 a share.
Tesoro Corp. (TSO 12.30, +0.04, +0.33%) , another refiner but not part of the NYSE Arca oil Index, fell 5.6% to close at $12.26 a share. Late Tuesday the company reported a fourth-quarter loss of $1.30 a share, more than the 70-cent per-share loss analysts had expected, and said its was suspending its quarterly dividend to preserve cash.
Standard & Poor's Equity Research cut its recommendation on Tesoro to "strong sell" from "hold" and trimmed its 2010 earnings estimate on the company to 32 cents a share from $1.08.
The NYSE Arca Natural Gas Index (XNG 539.71, -4.57, -0.84%) fell 0.8% to 539.7 points.
The Philadelphia Oil Service Sector Index (OSX 200.35, -1.06, -0.53%) was fared slightly better, down 0.5% at 200.4 points. But it, too, came under pressure from the bearish EIA oil inventory report, giving up early gains.
Those early gains were led by National Oilwell Varco Inc. (NOV 44.30, +0.33, +0.75%) , which advanced 3.1% to close at $43.97 a share after reporting a much stronger fourth quarter than Wall Street had expected. The shares had run as high as $44.91 at the open.
The Houston-based oilfield equipment and services company said it earned $394 million, or 94 cents a share, in the last three months of 2009, down from $585 million, or $1.40 a share, a year earlier. But analysts polled by FactSet Research had been looking for only 77 cents a share, and revenue was up 2% to $3.1 billion, also above analysts' expectations.
