Energy stocks fell again Monday as oil prices continued their recent slide.
Shares of integrated oil companies and oil field services firms slipped after crude oil fell to a one-month low on expectations that U.S. inventories will stay abundant, as forecasts for mild weather signaled that refiners will restrict heating oil production. Meanwhile, gasoline prices dipped slightly nationally, but rose on the West Coast.
"We have tons of heating oil out there, which is weighing on the market," said David Becker, energy derivatives trading manager at Citibank in New York. Crude inventories will have to decline to push prices higher, "but in these conditions, that's not going to happen."
Crude oil for February delivery fell 79 cents, or 4%, to $18.89 a barrel on the New York Mercantile Exchange, the lowest closing price since Dec. 13.
Prices have fallen more than 12% since Jan. 4, reversing the surge that followed an agreement by OPEC and other oil exporters last month to cut production by 2 million barrels a day. The cuts were an attempt to boost prices, which have fallen 30% since the terrorist attacks.
The recent slide has dried up some of the enthusiasm for energy stocks, which had climbed along with oil prices in late December. Three of the 10 worst-performing sectors so far this year in the Standard & Poor's 500 index are oil-related.
On Monday, the CBOE index of integrated oil companies fell more than 1%, as shares of 10 of its 11 members fell. Leading the index down were Royal Dutch Petroleum Co., off 87 cents to $47.40; Phillips Petroleum Co., off 91 cents to $58.34; and Amerada Hess Corp., down 93 cents to $58.98. The index is down 3.9% year to date.
Meanwhile, all 15 members of the Philadelphia index of oil service companies fell, with Nabors Industries Inc. falling $1.17 to $28.30 and BJ Services Co. losing $1.49 to $25.71. Among the industry's biggest names, Schlumberger lost 61 cents to $50.81 and Halliburton Co. slipped 18 cents to $10.77. The index's Monday loss of 2.9% deepened its year-to-date decline to --12.6%.
Though hard on energy investors, the slide in oil prices is a boon to motorists in many parts of the country. U.S. retail gasoline prices fell for the first time in four weeks over the last week, the Energy Department reported Monday.
Nationwide, the average pump price dipped 0.1 cents to $1.111 a gallon. Analysts said falling crude prices and the traditional drop in demand after the holiday driving season contributed to the decline.
However, West Coast gas prices jumped 3.3 cents to $1.184 a gallon, making the region's prices the nation's highest. Production cutbacks at California refineries are partly to blame for the higher prices.
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Energy-related stocks are among the worst performers so far this year. Falling oil prices are largely to blame. Worst-performing sectors of the Standard & Poor's 500 index this year:
Wireless services -22.8%
Oil & gas drilling -15.0
Oil & gas equipment -10.5
Oil & gas exploration -9.4
Diversified chemicals -8.1
Photographic products -7.9
Office electronics -7.5
Industrial gases -6.7
S&P 500 -0.8
Source: Bloomberg News, Standard & Poor's