Energy Stocks Are Beat Up

Updated from 1:40 p.m. EST

Energy-related stocks were broadly lower Tuesday as forecasts for warmer-than-normal weather dissuaded bulls from going long in the year's final week.

On Nymex, crude for February delivery closed floor trading down 27 cents to $58.16 a barrel. The contract was virtually flat last week in thin pre-holiday trading despite an Energy Department report that showed an unexpected 1.3 million-barrel rise in storage inventories.

After a mostly green Christmas, weather prognosticators were predicting a mild week for most of the country. According to AccuWeather.com, a strong flow of air from the Pacific Ocean is dividing as it reaches the West Coast, pinning cold in Canada and bathing most of the U.S. in relative warmth.

"As long as this pattern persists, frigid arctic air will remain well to the north, and that takes us through this week, anyway," the service said.

Since weather is the main determinant of energy prices at this time of year, the forecast has had bearish implication for commodity futures. Natural gas closed down $1.26 to $11.01 per million British thermal units, while heating oil fell about 6 cents to $1.65 a gallon.

Among stocks, ExxonMobil(XOM) fell 2.2% to $55.87; Chevron(CVX) fell 2.2% to $55.89; BP(BP) fell 2.3% to $63.33; Valero(VLO) lost 3.7% to $50.90 and Halliburton(HAL) lost 3.6% to $61.56.

Some stocks were seeing bigger moves. Parallel Petroleum(PLLL) lost 6.5% to $16.56; KCS(KCS) lost 4.8% to $24.25; and NGAS(NGAS) shed 5.5% to $10.24.

Among companies, Whiting Petroleum(WLL) fell after saying it would record a loss on its price hedging strategies both this quarter and next. The Denver company also sees natural gas production that is slightly below previous forecasts due to weather issues. The stock lost 3.5% to $40.30.

Dynegy(DYN) eased after agreeing to pay $370 million to exit a wholesale natural gas contract. The power producer expects to record a charge on the transaction and said its full-year earnings performance will now fall below previous estimates. Dynegy was down 16 cents, or 3.2%, to $4.91.

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