Updated from 11:11 a.m. EDT
Crude prices rose Friday as buyers materialized after a two-day selloff.
The August crude contract closed up 29 cents to $58.09 a barrel on Nymex. Gasoline futures held around $1.68 a gallon.
Oil tumbled Wednesday and Thursday after weather reports indicated strengthening Hurricane Emily was going to miss the major refining operations on the Gulf Coast. Now a Category 4 hurricane, Emily is expected to pass just south of Jamaica on Saturday, cross the Yucatan Peninsula in Mexico early Monday, then make its way to the Texas-Mexico border,
Also pressuring prices this week were bearish reports showing a decrease in Chinese oil demand in 2005, and a growing distillates inventory in the U.S.
Analysts say that oil prices have calmed down recently in part due to the cyclical nature of the commodity, especially with half the summer driving season over with no supply interruptions. The uptick could resume, however, in anticipation of the fourth-quarter peak demand season for heating oil.
In company news, the independent oil and gas producer
said Friday that it was unsuccessful in drilling an exploratory well in Texas. The company drilled the well to a depth of 19,093 feet, 203 feet short of the target depth. "Although some productive pay was logged ... it was not sufficient to justify the cost of a completion. Comstock has been unable to log the remaining 203 feet but had other indications that no hydrocarbons were present in the lowest section drilled," it said. The unsuccessful exploratory well will result in a $14 million write-off in the company's second quarter. Shares dropped 53 cents, or 2%, to $26.43.
In a phone interview Thursday, before Comstock Resources' drilling news today, Kim Pacanovsky, oil analyst for KeyBanc Capital Markets, said that the company was "challenged by guiding appropriately." She rates the company a hold but suggested that the company would get more credit from investors if it makes its onshore numbers. In that light, the $14 million write-off could be discouraging.
Earlier this week, Comstock Resources was upgraded to buy from hold by analyst Jay Saunders at Deutsche Bank. The analyst said Comstock's shares were at 5.7 times its 2005 earnings, or 40% below the pier group's average multiple. He also mentioned that the Big Sandy well in East Texas, the unsuccessful one, could be a catalyst for the company.
Among the major oil producers,
( RD) and
all ended lower.