Categories: Energy
Topics: General Energy

Oil shares lagged in 2009, Natural gas shares vault nearly 50%

NEW YORK (MarketWatch) - Energy stocks looked to end 2009 with a whimper Thursday, capping an eventful year and an astonishingly volatile decade with a tiny loss.

In the year's final session, and one of its quietest, the NYSE Arca Oil Index /quotes/comstock/10t!xoi.x (XOI 1,073, -4.55, -0.42%) was lolling around at 1,076 points in thin volume, down 0.1% from where it closed Wednesday.

For the year, the NYSE Arca Oil Index is up 97 points, or about 9.9%, rising from 980 at the start of 2009 to 1,077 on Wednesday's close. The index touched its 2009 high of 1,121 on Oct. 22 and its low of 764 on March 3.

In December, the NYSE Arca Oil Index traded mostly flat, finishing out the month close to its starting point of 1,069.

Over the past 12 months, the gauge of big oil producer and refiners lagged the roughly 20% gain from the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (INDU 10,493, -55.17, -0.52%) , while other sectors recovered and its status faded as a partial haven from the global financial meltdown.

Exxon Mobil /quotes/comstock/13*!xom/quotes/nls/xom (XOM 68.46, -0.31, -0.45%) , the largest company in the world by market cap, is finishing out the year with a loss so far of $11.06, or 13.9%. That's the worst performance among the 30 stocks in the Dow Jones Industrial Average.

Meanwhile Chevron /quotes/comstock/13*!cvx/quotes/nls/cvx (CVX 77.32, -0.33, -0.42%) , which re-joined the DJIA this year, is exiting 2009 at $77.65 a share, up $3.68, or 5% from its level of $73.97 a share a year ago.

The lackluster performance came despite a roughly 75% jump in oil prices, with crude oil futures rising to end 2009 near the $79-a-barrel mark, up from their ending point of $44.60 a barrel on year ago. See story on energy price outlook.

Despite the rise of crude, oil majors found themselves squeezed as refining margins for gasoline and heating oil came under pressure because the retail prices of fuel lagged in the face of supply gluts and slack demand tied to the recession.

At the same time, oil majors continue to face declining production in the North Sea and other big fields, while spending tens of billions to find oil elsewhere, just as national oil companies from Saudi Arabia to Venezuela move to assert control of their own resources.

Natural gas shares; oil drillers show life

While Big Oil lagged in 2009, oil service and natural gas shares posted eye-popping gains as the economy showed signs of life.

The NYSE Arca Natural Gas /quotes/comstock/27*!xng (XNG 547.67, 0.00, 0.00%) is ending 2009 at 548, up a hefty 46% from its level of 375 a year ago.

A big chunk of those gains came in December, with the gauge of major natural gas producers touching its 2009 high of 555 on Dec. 24 on rising prices and cold weather in the Northeastern U.S.

For the month, the NYSE Arca Natural Gas Index rose to 548 from 502, a gain of 46 points, or about 9%.

It's a sparkling end to a year that saw the gauge touch a multi-year low of 299 on March 2.

The sector was helped by higher natural gas prices, as well as speculation of more deals following Exxon Mobil's move to buy XTO Energy /quotes/comstock/13*!xto/quotes/nls/xto (XTO 46.75, -0.25, -0.53%) in the biggest merger in the energy sector in years. See story about XTO Energy merger.

Meanwhile, the Philadelphia Oil Service Index /quotes/comstock/10y!i:osx (OSX 196.35, +0.15, +0.08%) climbed to 199 from 121 in 2009, a gain of 64%. The gauge of drilling specialists touched its low for the year 0f 108 on March 2. Its 2009 high of 211 came on Oct. 11.

For the month of December, the Philadelphia Oil Service Index rose to 197 from 191, a gain of 6 points, or about 3.2%.

The market is closed Friday for New Year's Day.

Energy stocks post big jumps for the decade

The NYSE Arca Oil Index ended at 433 on the last trading day of 1999, rising through the 2000s to 1,077 as of Wednesday's close for a gain of about 150%.

The NYSE Arca Natural Gas Index finished 1999 at 112, rising to 548 for a big rise of 443 points, or about 389%.

The Philadelphia Oil Service Index wrapped up the last millennium at 52 points and rose about 283%.

Back in 1999, oil and natural gas companies were shunned by Wall Street during the height of the tech bubble, which started to burst with the crash of the Nasdaq in early 2000.

Oil prices average $15.56 a barrel in 1999, according to the Energy Information Administration, up about 43% from the year before as the global economy hummed along.

The coming years saw the Sept. 11 attacks, the invasion of Iraq, and the rise of the economies of the developing world - all of which contributed to a big jump in oil prices, culminating in an all-time high of $147 a barrel in the summer of 2008.

Energy stocks mostly went along for the ride, with the Exxon Mobil posting the fattest corporate profit of all time in the same year.

The global financial meltdown pushed oil prices down below $40 a barrel about a year ago, but oil prices quickly rebounded to $80 a barrel over the summer as the economy started to recover.

Natural gas prices, however, remained low until late in 2009, with a recovery in recent months in the face of a cold winter seen in the U.S.  

Steve Gelsi is a reporter for MarketWatch in New York.
Jim Jelter is Industrials Editor for MarketWatch in San Francisco.