Energy Stocks: TransCanada, Chevron down; energy stocks up

NEW YORK (MarketWatch) � Shares of TransCanada Corp. fell Wednesday on a federal rejection of its Keystone XL pipeline application, while refiners and oil-service stocks led gains in the broader energy sector.

Operating under a deadline to reach a decision as part of a deal on the payroll-tax extension, President Barack Obama turned down TransCanada�s multibillion-dollar proposal to build a pipeline from the oil-sands region in western Canada to the pipeline hub of Cushing, Okla.

Click to Play Talks on a Greek �haircut� resume

Greece could be on the verge of an agreement that would help the country avoid default.

TransCanada TRP � CA:TRP �will be free to re-apply if it were to reroute the path of the pipeline around a controversial watershed in Nebraska. See: Obama administration to reject Keystone.

U.S.-listed shares of TransCanada dropped 1.4%. In a statement after the closing bell, TransCanada said it plans to re-apply for the pipeline.

Among the broad energy-sector gauges, the Philadelphia Oil Service Index OSX �moved up by 3.5%, while the NYSE Arca Oil Index XX:XOI �rose 1.7% and the NYSE Arca Natural Gas Index XX:XNG �added 1.3%.

Among upside movers, shares of Rowan Cos. RDC �jumped 5.1% and Helmerich & Payne HP �rose 6.4%.

Shares of refiners Sunoco Inc. SUN , Valero Energy Corp. VLO , Tesoro Corp. TSO �and Marathon Petroleum Corp.MPC �all ranked as top gainers among components of the S&P 500 index SPX .

While refiners are expected to show losses when they report results for the fourth quarter, conditions have improved of late.

�Margins have rallied off year-end lows,� Credit Suisse analyst Edward Westlake said in a note to clients. �We believe that current share price levels provide an opportunity to buy the refiners.�

Sunoco rose 5.3%, Marathon Petroleum jumped 5.7%, Valero Energy gained 4.6% and Tesoro moved up by 3.2%.

Chevron falls under pressure

Despite the broad move up by energy stocks on Wednesday, Chevron CVX �dipped 0.1%. Late Tuesday, the Dow Jones Industrial Average component said it�s still searching for two workers missing from a drilling rig off the coast of Nigeria, while 152 people on the rig and an associated barge were safely evacuated following a fire. Two workers remained hospitalized due to minor burns.

�Initial indications point to the possible failure of surface equipment during drilling operations that led to a loss of well control,� the San Ramon, Calif.-based oil major said. �The well continues to burn and the rig has partially collapsed. At this time, the company cannot estimate how long the fire will continue.�

Also in Wednesday�s spotlight, shares of Hess Corp. HES �rose 4%. The oil and gas producer said it will book a fourth-quarter charge of $525 million related to shutting down the Hovensa LLC refinery in St. Croix, U.S. Virgin Islands.

The refinery is run by a joint venture between Hess and Petroleos de Venezuela SA, the state-owned oil firm. Hovensa said its losses at the refinery totaled $1.3 billion in the past three years.

The losses �have been caused primarily by weakness in demand for refined products due to the global economic slowdown and the addition of refining capacity in emerging markets,� Hess said. Following the shutdown of the refinery, the complex will serve as an oil storage terminal.

And among smaller-cap energy firms, Credo Petroleum Corp. CRED promoted Michael Davis to chief executive. He previously served as vice president of land and business development.

Shares of Credo, an independent oil and gas company with assets in the North Dakota, Kansas, Nebraska, the Texas Panhandle and Oklahoma, dipped 0.5%.