Oil Drags Down Energy Stocks

With crude at a seven-week low, traders fret about profits.

Author:: TSC Staff
Publish date:: Nov 15, 2004 3:42 PM EST

Updated from 2:45 p.m. EST

Crude oil fell to a seven-week low Monday, briefly breaking through the $46-a-barrel mark and dragging shares of several big energy companies lower with it.

The December futures contract closed down 52 cents to $46.87 in Nymex floor trading. The benchmark U.S. was down more than 2% at one point in the session.

Crude prices are down 17% since hitting a record high of $55.17 in late October, as U.S. production slowly returns to normal following widespread disruption to operations in the Gulf of Mexico because of Hurricane Ivan.

Monday's crude selloff took a toll on oil stocks, too, as traders worried about profit margins. Among stocks,

ConocoPhillips

(COP) - Get Report

fell $1.14, or 1.3%, to $86.75;

ExxonMobil

(XOM) - Get Report

lost 94 cents, or 1.9%, to $49.48;

Royal Dutch/Shell

(RD)

lost 71 cents, or 1.3%, to $55.61; and

ChevronTexaco

(CVX) - Get Report

lost $1.51, or 2.8%, to $53.06.

The

Amex Oil Services Holdrs Trust

(OIH) - Get Report

fell $2.60, or 3.2%, to $78.83. Before Monday, the security had largely hung on to its value during oil's swoon, closing at $82.58 on Oct. 25, the day crude peaked.

Traders Monday had an eye on the situation in Nigeria, where the oil workers union has authorized a strike on Nov. 17.

Worries about short-term supply have dominated the market since the spring. Attacks on Iraq's oil infrastructure -- including the most recent one Sunday -- have caused periodic production problems of varying consequence there. Threats to production in Norway, Russia, Venezuela and Nigeria have also been a factor.