By Steve Gelsi

Petroleum and natural gas shares rose after a mixed weekly inventory report, but shares of oil drillers fell back on Wednesday.

Gasoline supplies dropped by 3 million barrels in the week ended March 6, the Energy Information Administration reported. Analysts surveyed by Platts had expected a reduction of 1.2 million barrels.

Meanwhile, crude inventories rose by 700,000 million barrels, while analysts had expected a decline of 1 million barrels.

After the data, April crude lost $1.33, or 2.9%, to $44.38 a barrel on the New York Mercantile Exchange.

The Amex Oil Index (XOI) rose 1% to 832, adding to big gains in the previous session. U.S. refining giant Valero Energy Corp. (VLO) rose 2% to $17.37. Sector leader Exxon Mobil Corp. (XOM) edged up 0.1% to $67.46.

The Amex Natural Gas Index (XNG) rose 1.1% to 319, led by a jump of 5.5% to $42.61 from Devon Energy Corp. (DVN).

The Philadelphia Oil Service Index (OSXX) fell 0.9% to 118, pulled down by a drop of 4% to $10.88 from component Weatherford International Ltd. (WFT).

Among energy stocks in the spotlight, ConocoPhillips (COP) rose 1.3% to $38.49. The company stood by its plans to spend $12.5 billion in 2009 on capital programs. The oil giant also said it will scale back drilling in North America along with the rest of the industry. It also disclosed a significant accumulation of acreage in the Eagleford shale in south Texas.

Chevron Corp. (CVX) rose 0.9% to $62.35, a day after the oil giant said it expects to grow its production by 4% this year without acquisitions.

Halliburton Co. (HAL) plans to issue $2 billion in senior notes in two tranches. Shares fell 1.3% to $16.14.

Transocean Ltd. (RIG) rose 1.7% to $53.17. Citi added the drill-ship specialist to its Top Picks Live list. Schlumberger Ltd. (SLB) fell 0.9% to $39.18. Cameron International Corp. (CAM) dipped 1.8% to $19.89. Citi downgraded both of the stocks to hold from buy.

Shares of state-turn Petroleo Brasileiro (PBR), or Petrobras, rose 1.4% to $29.13. Brazil president Luiz Inacio Lula da Silva said in an interview with The Wall Street Journal and Dow Jones Newswires that he continues to see a big role for industry heavyweights such as ExxonMobil and Royal Dutch Shell Plc (RDSA) as the company develops its offshore oil discoveries.

-Steve Gelsi; 415-439-6400; AskNewswires@dowjones.com

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