NEW YORK (MarketWatch) — Energy stocks fell across the board Friday while the overall market retreated and crude-oil futures dropped, even as XTO Energy and ConocoPhillips drew ratings boosts from Goldman Sachs.
Despite losses for the day, energy stocks managed to turn in a positive week.
In Friday’s action, sector leader Exxon Mobil (XOM:
69.83, -1.40, -2.0%)declined 1.8% to $69.98 while Chevron(CVX:
68.90, -1.27, -1.8%) fell 1.8% to $68.90. Both oil majors are components of the Dow Jones Industrial Average ($DJ:
7,776.18, -148.38, -1.9%) , which fell 148 points, or 1.9%.
The Amex Oil Index (XOI:
883.21, -27.47, -3.0%) lost 3% to end at 883, and the Amex Natural Gas Index (XNG:
360.72, -14.49, -3.9%) slipped 3.9% to close at 361. The Philadelphia Oil Service Index ($OSX:
, , ) retreated 4% to 132.
Oil futures dropped $1.96, or 3.6%, to end at $52.38 a barrel on the New York Mercantile Exchange. The contract ended the week up for a sixth straight week, but only by 0.6%. See Futures Movers.
Oil’s quick run from $40 to $50 in the past month, plus capital spending pullbacks by energy firms continues to stoke speculation about a spike in fuel prices coming down the road. See full story.
Goldman Sachs kept its attractive view on exploration-and-production stocks. Analysts at Goldman shuffled ratings on several energy companies, including the addition of Chesapeake Energy (CHK:
18.34, -0.66, -3.5%) to its conviction buy list, replacing XTO Energy (XTO:
31.97, -1.57, -4.7%) , which was downgraded to neutral.
Shares of Chesapeake fell 3.5% to $18.34 and XTO dropped 4.7% to $31.97.
Goldman also added ConocoPhillips (COP:
40.38, +0.07, +0.2%) to its Americas buy list, saying the integrated oil major is “too inexpensive to ignore any longer.” Shares of ConocoPhillips rose 2 cents to $40.33.
Other moves at Goldman included an upgrade of Pioneer Natural Resources (PXD:
18.16, -0.25, -1.4%) to buy from sell, a downgrade of Talisman Energy (TLM:
10.62, -0.56, -5.0%) to sell from neutral and a maintained sell rating on Anadarko Petroleum (APC:
41.01, -1.91, -4.4%) .
Shares of Pioneer Natural Resources dipped 25 cents to $18.16, Talisman Energy dropped 5% to $10.62 and Anadarko Petroleum retreated 4.5% to $41.01.
Jacques Rousseau of Back Bay Research on Friday cut his rating on Frontier Oil (FTO:
14.00, -1.25, -8.2%) to hold from buy as the refiner faces the relatively higher cost of Canadian crude oil that it uses compared to the price of gasoline and other refined products. Frontier fell 7.6% to $14.09.
While the price of gasoline has been edging up over the $2-a-gallon mark, it hasn’t kept pace with the recent surge in crude prices to above the $50-a-barrel level from about $40 a month ago.
Rousseau also trimmed his estimates for Valero (VLO:
19.05, -0.82, -4.1%) , Sunoco (SUN:
27.24, -1.61, -5.6%) , Western Refining (WNR:
12.51, -0.45, -3.5%) , Holly Corp. (HOC:
22.40, -1.52, -6.3%) and Tesoro (TSO:
14.67, -1.69,-10.3%) .
Another challenge now facing U.S.-based refineries is imported gasoline from Europe. Currently, gasoline from the Continent sells at a wholesale price of about 14 cents a gallon lower than U.S. gasoline. It’s profitable for overseas gasoline makers to ship it to the U.S., a move that costs only 7 cents a gallon, Rousseau said.
Energy stocks up for the week
Even with the losses on Friday, energy stocks are up for the week.
The Amex Oil Index (XOI:
883.21, -27.47, -3.0%) closed at 883 on Friday, 27 point, or 3.2% above its level of 856 on March 20.
The Amex Natural Gas Index (XNG:
360.72, -14.49, -3.9%) closed Friday at 361, up 3 points, or about 1% above its week-ago finish of 358.
The Philadelphia Oil Service ($OSX:
, , ) closed at 132 on Friday, ahead of its week-ago ending point of 128 by 4 points or 3.1%.
Steve Gelsi is a reporter for MarketWatch in New York.