By Steve Gelsi
Energy stocks rose with the broader market on Tuesday, as big
energy deals from Total SA, Devon Energy and China National
Petroleum moved onto the sector's radar screen
The NYSE Arca Oil Index (XOI) rose 0.7% to 1,067. The NYSE Arca
Natural Gas Index (XNG) gained 0.4% to 544. Philadelphia Oil
Service Index (OSX) was up 0.5% to 196.
The Dow Jones Industrial Average was 52 points higher in recent
trading.
Among stocks in the spotlight, Devon Energy (DVN) rose 0.8% to
$71.20.
The natural gas and oil production firm announced a $1.3 billion
sale of Gulf of Mexico assets, including working interest in two
Chevron (CVX) projects, and one Petrobras (PBR) project.
Meanwhile Total SA (TOT) said it's moving to expand its
cooperation with China National Petroleum through a multibillion
natural-gas project in northern China as well as prospective deals
in Iran and Venezuela. Shares of Total gain vlo2.3% to $64.05.
Shares of refiner Valero (VLO) fell 0.2% to $17.07. Sunoco (SUN)
dipped 0.2% to $25.83. Western Refining (WNR) 0.4% lower at $4.74,
while Holly Corp. (HOC) was off rose 1.2% to $24.76.
Analyst Jacques Rousseau of Soliel Securities said he expect
these refiners to lose money in the fourth quarter, with "some of
those losses very significant."
Rousseau blamed poor refining margins as oil prices have crept
up more rapidly than retail gasoline, heating oil and diesel
prices.
"Although refining margins have improved somewhat from the lows
of November, we do not anticipate much upside in the near term due
to overcapacity and seasonally weak demand," Rousseau said in a
note to clients.
He maintained his market weight rating on the stocks, adding
that most of the bad news has already been priced into the
companies.
Crude-oil futures eased back from early gains in electronic
trading but stayed over $73 a barrel. The Organization of Petroleum
Exporting Countries on Tuesday left production quotas unchanged as
widely expected, according to reports.
-Steve Gelsi; 415-439-6400; AskNewswires@dowjones.com