Energy Stocks Test The Plus Column

   By Steve Gelsi 
 

Energy stocks opened higher Thursday, with shares of petroleum producers and refiners recovering from four straight days of losses.

The NYSE Arca Oil Index (XOI) rose 1.2% to 867, buoyed by beaten down shares of Valero (VLO) and Sunoco (SUN), each up more than 2%.

The NYSE Arca Natural Gas Index (XNG) rose 1.5% to 384. The Philadelphia Oil Service Index (OSX) rose 0.9% to 149.

Among energy stocks in the spotlight, ConocoPhillips (COP) rose 1.4% to $39.99. The U.S. oil major and Abu Dhabi National Oil Company said they signed a deal to develop the Shah Gas Field in Abu Dhabi.

ConocoPhillips will hold a 40% stake. The project includes gas gathering systems, gas processing trains and product pipelines to process and transport 1 billion cubic feet per day of gas, associated liquids and sulfur.

The Shah Project will include one of the largest sulfur removal plants in the world and will also include a sulfur processing and exporting facility, which will be located in Ruwais Industrial City, U.A.E.

Also in the spotlight, Murphy Oil (MUR) shares rose 1.2% to $50.97. The company said its Thunder Hawk field located in the Gulf of Mexico in 5,700 feet of water has begun production.

"Production from Thunder Hawk will be ramped up during the second half of the year and should contribute nicely to our increasing production profile," Murphy Oil said. Partners in the project include Eni (E) and StatoilHydro (STO).

Meanwhile, U.S. senators began to consider proposed cap-and-trade legislation to curb carbon dioxide emissions - a move that affects refiners and power companies.

In an expected move, the Organization of Petroleum Exporting Countries reduced its five-year forecast for oil-field spending by about a third in the face of the recession and lower fuel demand.

-By Steve Gelsi; 415-439-6400; [e-mail]