Energy Stocks Sink Along With Crude Prices

With oil prices trading below $100 per barrel again, it�s wasn�t a pretty end for energy shares Friday.

Crude concluded its biggest three-day nosedive since August, with the front-month U.S. crude futures contract closing at $98.56 per barrel, down $3.98, following the weak jobs report. In addition, U.S. oil inventories rose more than analysts expected last week, up 2.8 million barrels to 375.9 million barrels. More on that here.

For newly-public Phillips 66 (PSX), the refining and chemicals business spun out of ConocoPhillips (COP) it wasn’t a good week. Shares of Phillips 66 sank nearly 4% on the day to $30.16, while ConocoPhillips shares fell 2%. Delta Air Lines (DAL) bought a Phillips 66 refinery and related businesses this week, a move we said made sense given the high cost of fuel; shares of Delta were up slightly Friday, closing the week at $11.

Among other refiners: Valero (VLO) fell 2.5%, Marathon (MRO) fell 3%, Tesoro (TSO) sank 1.6%, Sunoco (SUN) was off just 0.61% and Western Refining (WNR) was down 3.3%.

The big integrated oil and gas exploration and production companies as a whole tend to have less volatility when oil prices swing, depending on how much exposure they�ve added to natural gas. Among them, shares of ExxonMobil (XOM) were down 1%, Chevron (CVX) was down 2%, BP (BP) shares were off by 2.5% and Total (TOT) stock fell 1.8%

Oilfield services companies were hard hit: Transocean (RIG) fell 4.6%, while shares of� Schlumberger (SLB)dipped 3.7%� and Tesco (TESO) dropped 3.8%. Stock of driller Noble (NE) dropped nearly 6%.

Explorers Apache (APA) and Anadarko Petroleum (APC) each fell more than 3%. Southwestern Energy (SWN) tumbled, down 7%. SandRidge Energy (SD) was among the lone energy stocks in the green, up 2.4% after a positive earnings report.

Noting sharp corrections in oil prices in May in the past two years, Barclays oil analyst Amrita Sen writes:

“With OPEC output at three-year highs, alongside a softening in demand conditions due to a combination of� unseasonably warm weather and high prices curbing growth, have resulted in inventory builds, exacerbated by� record refinery runs globally. Equally, the return of Iran to the negotiating table has eased geopolitical concerns particularly for those who expected the stand-off between Iran and Israel to culminate in a military stand-off this quarter. However, beyond the short-term softness, we expect prices to find support into Q3.”