ASSOCIATED PRESS An oil refinery in Iraq. As tensions mounted over U.S. intervention in Syria and crude inventories fell, oil futures prices crept higher.
The price for U.S. benchmark West Texas Intermediate was up $1.10 to $108.32 per barrel. For Brent, the global benchmark, prices rose more modestly in Thursday trading, up 14 cents, to near $115 per barrel.
The U.S. Energy Information Administration reported Thursday that oil stockpiles for the week ended Aug. 30 fell to 1.8 million barrels. That’s a sizable figure, though analysts polled by Platts were looking for a larger decline of 2.5 million barrels, according to MarketWatch. Gasoline supplies also fell by 1.8 million barrels, while expectations called for a decline of 1 million barrels.
Natural gas prices fell more than 2% to $3.59 per million British thermal units Thursday, but have been soaring on hot weather in the South and on tropical storm activity. Tropical storm Gabriel is expected to miss the Gulf of Mexico, an important gas hub, but more storms are brewing.
Here was Chicago energy Analyst Phil Flynn earlier today explaining why the price story today is more about domestic futures:
“Oil prices are pushing back the timing of an attack on Syria so now the market can focus on the price impact of Fed tapering. The Senate Foreign Relations Committee eked an approval of a war resolution by vote of 10–7, not exactly a ringing endorsement. What that means is that the October crude delivery will be unencumbered by war but may face the full fury of the Fed. The short term yields are rising as the economic data suggests that despite the likely will start the long journey back to interest rate normalcy. Whatever that happens to be.”
Among energy stocks rising today: Producers of gas and gas liquids were higherm, including Devon (DVN) and Consol Energy (CNX) rose about 2% each, while drillers Nabors Industries (NBR) and Rowan Companies (RDC) jumped more than 3% apiece. Oilfield services names Halliburton (HAL) and Baker Hughes (BHI) each rose nearly 2%.
Todd Scholl at Wunderlich Securities initiated coverage of offshore drillers Thursday, saying that for investors looking for long-term returns, he favors decent valuatins and, among large-cap companies, those with strong dividends. His observations and picks:
Top Large Cap Picks: Diamond Offshore (DO), Noble (NE), and Seadrill (SDRL) Top Small/Mid Cap Picks: Hercules Offshore (HERO) and Rowan Companies (RDC) Top Special Situation Picks: Pacific Drilling (PACD), Ocean Rig (ORIG), and Vantage Drilling (VTG) Initiated coverage with HOLD ratings: Transcoean (RIG), Atwood (ATW), and Ensco (ESV)
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