Fed Boosts Oil Futures, But Equities Are Mixed Post-Earnings

Published on Wednesday, 25 January 2012 19:36 Written by Todd Shriber

New York, January 25^th  (TradersHuddle.com) – Oil futures reclaimed the all-important $100 per barrel level on Wednesday after the Federal Reserve indicated it plans to keep short-term interest rates near zero through 2014. Those comments sent U.S. dollar bulls running for cover, propelling NYMEX-traded crude for March delivery to a gain of $1 at $99.95 per barrel. Brent crude gained 71 cents to settle at $110.74 a barrel.

The Energy Information Administration said U.S. oil inventories jumped by 3.6 million barrels last week, a bigger-than-expected rise, but the Fed comments were enough to stoke some buying in the oil pits.

Even while oil futures posted a decent day, the results were mixed regarding oil stocks. Earnings reports from big oil names kicked off today led by ConocoPhillips (NYSE: COP) and Occidental Petroleum (NYSE: OXY), the third- and fourth-largest U.S. oil companies, respectively. Hess (NYSE: HES) also joined in on the oil earnings parade.

ConocoPhillips opened higher, but gradually trended lower throughout the morning and looked poised to close lower by about 1% despite reporting fourth-quarter results that topped Wall Street estimates. There were more encouraging headlines from the company. Texas-based ConocoPhillips said it expects to complete the spin off of its downstream business by the end of the second quarter and the company added that it plans to cut natural gas output amid slumping prices for that commodity. Earlier this week, Chesapeake Energy (NYSE: CHK), the second-largest U.S. natural gas producer, said it would pare its natural gas output and focus more on increasing oil production.

Shares of Hess plunged 5% after the company posted a fourth-quarter loss of $131 million, or 39 cents per share, compared with a year-earlier profit of $58 million, or 18 cents per share. Decreased production and the sale of an interest in a shuttered refinery plagued Hess’ fourth-quarter numbers.

California-based Occidental performed far better on the day. The shares added 2.5% on better than average volume and closed within earshot of the intraday high. Occidental said its U.S. oil and natural-gas production was 449,000 barrels a day in the quarter, topping the company record set in the third quarter of 2011. Occidental added that it was able to boost production in Iraq to 9,000 barrels per day in the fourth quarter from 4,000 barrels per day in the third quarter. The company restored some of its lost Libyan production, pumping 1,000 barrels per day in the North African country during the fourth quarter.

Big name energy stocks remaining on the earnings docket this week include coal giant Consol Energy (NYSE: CNX), which reports before the bell Thursday, and Dow component Chevron (NYSE: CVX). Chevron, the second-largest U.S. oil company, reports before the bell Friday. The company has already warned its fourth-quarter results will lag its third-quarter numbers.