By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) - Energy stocks rose early Wednesday on a set of surprisingly bullish weekly U.S. oil supply numbers and ahead of an announcement on interest rates from the Federal Open Market Committee.
The NYSE Arca Oil Index (XOI 1,067, +15.91, +1.51%) rose 1.4% to 1,066. The NYSE Arca Natural Gas Index (XNG 533.42, +7.22, +1.37%) rose 1.3% to 533. The Philadelphia Oil Service Index (OSX 195.36, +4.43, +2.32%) rose 2.2% to 195.
Gains across the sector accelerated on a 3% jump in crude prices after the Energy Information Administration reported crude inventories fell 3.7 million barrels in the week ended Dec. 11. Energy analysts polled by Platts Monday had been expecting the report to show a 2-million-barrel crude inventory drawdown in crude supplies.
Among energy stocks in the spotlight, Chevron (CVX 78.63, +1.26, +1.63%) rose 1.6% to $78.63. The energy giant said it inked a deal to sell liquid natural gas from its Gorgon facility in Australia to Japan's Chubu Electric Power Co. Chevron will sell 1.44 million metric tons per year of LNG for 25 years. As part of the deal, Chubu Electric will purchase a 0.417% equity stake in Gorgon.
Cobalt International Energy Inc. (CIE 13.45, -0.04, -0.30%) shares briefly fell as low as $13.10 in their stock market debut on Wednesday, below the stock's offering price of $13.50 a share. The Houston-based oil production firm with leases in the Gulf of Mexico, offshore Angola and offshore Gabon priced 63 million shares at $13.50 a share, raising $850 million. The initial public offering priced below its $15 to $17 estimated price range.
Range Resources Corp. (RRC 48.85, +1.51, +3.19%) said Wednesday its net production rate in the Marcellus Shale region of Pennsylvania reached 100 million cubic feet equivalent (Mmcfe). The Fort Worth, Texas energy company said the figure touches the high end of its production target of 80 to 100 Mmcfe net per day. Range's Marcellus Shale production target exit rate for 2010 is 180 to 200 Mmcfe net per day. Range Resources said it now expects a 2011 exit rate from the Marcellus Shale of 360 to 400 Mmcfe net per day.
Range entered 2009 running four rigs in the Marcellus Shale play and will end the year with eleven rigs, including both horizontal and vertical rigs.
