SAN FRANCISCO (AFX) -- Oil and gas stocks snapped a three-day losing streak Wednesday, rallying back late in the session to power past another drop in spot crude oil prices.
The Amex Oil Index rose 0.2% to 1,023.64 points, the Amex Natural Gas Index added 0.6% to 385.48 points, and the Philadelphia Oil Service Index ended fractionally higher at 190.29 points.
April crude futures fell 2.5% to a three-week low of $60.02 a barrel after tumbling as low as $59.25 intraday, weighed down by the government's weekly report on U.S. crude oil supplies, which are now at their highest levels since 1999.
Meanwhile, the Organization of Petroleum Exporting Nations announced in Vienna that it will leave its current production quotas unchanged ahead of an expected second-quarter drop in demand. The move matched expectations of energy traders worldwide.
April natural gas futures on the New York Mercantile Exchange finished the day with a 3-cent loss at $6.648 per million British thermal units, continuing the commodity's downward slide at the tail end of one of the mildest winter in years.
The Energy Department will provide an update on natural-gas stocks in storage Thursday morning, covering the week ended March 3.
Meanwhile, Exxon Mobil Corp. said it was planning more than 20 project start-ups through 2008 to boost energy output. The comments were made by Rex Tillerson, chairman and chief executive of the world's biggest publicly traded oil company, to analysts at the New York Stock Exchange.
Tillerson, in a separate meeting with Dow Jones & Co. editors and reporters, also accused the U.S. government of doing a disservice to the American public by suggesting the country could achieve energy independence. He disputed this, noting the nation's heavy reliance on imports to meet its needs and the nature of long-term projects to secure oil and gas abroad.
Tillerson also called current oil prices 'unsustainable' in the long term, though it will take some time for new capacity to come on line.
Separately, Tillerson told a group of analysts in New York that Exxon Mobil plans to boost capital spending by more than 10% over the next four years as it builds up its oil production and chemicals business.
Exxon Mobil's stock, part of the Dow Jones Industrial Average, closed with a 14-cent, or 0.1%, loss at $59.71.
In Washington, legislation aimed at opening 3 million offshore acres to exploration in the Gulf of Mexico cleared the Senate Energy Committee, in a 16-5 vote, but still faces opposition from lawmakers keen to maintain a ban on drilling in environmentally sensitive waters along their coasts.
Natural gas company Oneok Inc. revised its 2005 earnings to reflect a faulty software calculation of gas derivatives, lowering its net income by $8.1 million, or 8 cents a share, and its energy services operating income by $13.2 million.
The Tulsa, Okla.-based company said it now expects 2006 earnings of $2.30 to $2.36 a share.
Oneok shares fell 19 cents to close at $29.38. This story was supplied by MarketWatch. For further information see www.marketwatch.com.