(Energy winners, Exxon, Chevron story updated for market close)
NEW YORK (TheStreet) -- Weakening U.S. consumer confidence and renewed housing market double-dip fears kept the light trading levels on Tuesday, but major energy stocks were defying the uncertainty and rising to new 52-week highs. The S&P 500 energy sub-sector was up 0.5%, while the S&P barely finished in the green on Tuesday at the close.
Among the fresh 52-week high oil stocks on Tuesday were
Crude oil futures were above the previous settle price of $91 on Tuesday afternoon, trading as high as $91.67, before settling at $91.49.
With many economists predicting that crude will surpass $100 in 2011, and energy sector analysts bullish on exploration and production activity by the majors next year, the energy sector has been among the market's better performers as the year draws to a close.
Chevron announced earlier this month a 29% increase in spending.
Chevron, for example, is up 11% in the past month, vs. an
index return of 5% and a
Dow Jones Industrial Average
one-month return of 4%.
The biggest players among the U.S. independent energy producers were outpacing the gains in the global majors on Tuesday, with
, up 1.1% and 0.6%, respectively.
were among U.S. energy independents attaining intraday 52-week highs on Tuesday before giving up some of their gains in the afternoon.
Murphy Oil still finished up 1%, the second-best to Chevron in the energy sector on Tuesday.
The energy rally to close out the year has been in evidence for at least the past month, with many oil service stocks hitting 52-week highs in recent trading. Oil service companies
have returned in the double digits in the past month also and remain near 52-week high levels.
Back in the middle of December, Barclays Capital predicted a major rise in global exploration and production spending among the oil majors in 2011, which would buoy the business of the oil service companies.
The planned acquisition by Chevron of
for $3.2 billion kick-started rumors in November about a flood of M&A activity in the energy sector, and that M&A chatter was taken up another notch on Tuesday.
cited a report from consultant Derrick Petroleum Services that estimates $90 billion in energy assets that will be on the block in 2011.
The bullish M&A prediction dovetails with the expected increase in global exploration and production activity next year. The
reported that it's not just BP selling assets to fund its oil spill-liability war chest, but
Royal Dutch Shell
, ExxonMobil and ConocoPhillips that have put "sizable" assets up for sell.
It's the sheer size of the energy portfolios predicted to change hands in 2011 that stood out in the
report. In mid-2009, the same estimate for assets on the market was $20 billion, and a year ago it was $46 billion. The
reported that the industry has averaged $30 billion to $40 billion in asset sales in the past three to four years. During this period, uncertainty about the pace of global economic recovery kept a lid on global E&P activity.
While balance sheets have been strong in the energy sector, the integrated oil majors are now looking to remove the brakes from global exploration and production. The price of oil was stable and rising in 2010, and the world's biggest E&P companies are now turning back to core activity to increase return to shareholders.
Integrated oil majors like ExxonMobil have always been major dividend producers and serial purchasers of their own stock as a way to prop up share prices. However, the integrated oil majors are hoping to shift the balance in 2011 away from financial engineering or returns and back to exploration and production driving stock performance.
ConocoPhillips ended trading at $67.55 on Tuesday, up 0.6%, though slightly below the intraday 52-week high of $67.64. ExxonMobil shares closed at $73.42, also up 0.6%, and slightly below its intraday 52-week high of $73.50. Trading volume in all the energy sector outperformers, though, was in line with the light trading trend in equities during the holiday week.
Chevron shares, not among the companies specifically mentioned in the rumors about energy assets on the block, were the biggest gainers amid the energy sector strength, up 1.2% and closing at $91.19, short of its 52-week intraday high of $91.42, which was reached earlier on Tuesday.
Year to date, it's Conoco Phillips that has gained the most among the triumvirate of U.S. energy majors, up more than 32%. Chevron shares have gained more than 18% this year, while Exxon shares have risen year to date by 7.5%.
-- Written by Eric Rosenbaum from New York.
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