Updated from 2:09 p.m. EDTCrude futures closed lower Friday as more U.S. refineries announced they were coming back on line following the double blast in the Gulf of Mexico from Hurricanes Rita and Katrina. Light, sweet crude for November delivery closed down 45 cents to $62.63 a barrel. On Thursday, the contract fell $1.04 to $63.08. Gasoline lost almost a penny at $1.75 a gallon, while heating oil slid 4.69 cents to $1.95 a gallon. Natural gas finished up 11.6 cents to $13.22 per million British thermal units. "We're seeing the product very weak because refineries are coming back on line faster than we had expected," said Stacy Nieuwoudt, analyst at Pickering Energy Partners. "This, combined with potential demand issues, is bringing down the crude complex." For example, Chevron ( CVX) said it restarted its Pascagoula, Miss., refinery, which had been shut down prior to Hurricane Katrina. The refinery is Chevron's largest wholly owned petroleum refinery. It processes an average 325,000 barrels of crude oil a day and makes a variety of products including 5 million gallons of gasoline a day. Also, ConocoPhillips ( COP)is reported to have restarted its 255,000 barrel-per-day refinery in Lake Charles, La., according to Reuters, after the facility was closed for Hurricane Rita last month. The Energy Department reported on Thursday that crude oil inventories rose by 1 million barrels last week, about 100,000 more than expected. Distillate stocks slid by 3.4 million barrels and gasoline stock fell by about 2.7 million barrels; both were about twice the expected decline. And in the Gulf of Mexico, the U.S. Minerals Management Service said Friday the Gulf of Mexico's shut-in oil production was about 1 million barrels of oil per day, or the equivalent of 67.3% of the gulf's daily oil production. Friday's shut-in gas production was 5.647 billion cubic feet per day, or the equivalent of 56.5% of the gulf's daily gas production. Most of the major oil companies were up in recent trading. The Amex Oil Index was up 0.49%, while the Philadelphia Oil Service Sector was up 2.25%. In other company news, Occidental Petroleum ( OXY) agreed to buy Vintage Petroleum ( VPI) in a deal that is worth more than $3.5 billion. Fulcrum upgraded Occidental from neutral to buy and shares of Vintage were up nearly 28% in recent trading.
UBS did some upgrading as well, raising Anadarko Petroleum ( APC)from neutral to buy. Banc of America Securities upgraded Schlumberger ( SLB)from neutral to buy. And Stanford Research upgraded Encore Acquisition ( EAC)from hold to buy. Maverick Tube ( MVK) said it expects its third quarter earnings, including the impact of Hurricane Rita, losses from discontinued operations and severance costs, to be in the upper range of its previously announced 80 cents to 90 cents a share range. Analysts polled by Thompson Financial had put the Chesterfield, Mo.-based company's earnings at 88 cents a share. Maverick, which makes welded tubular steel products for the energy industry, will release its third quarter results on Oct. 25. BP ( BP) said Thursday it will invest up to $2.2 billion to double production from its acreage in the Wamsutter gas field in the Rockies. BP said it expects the drilling program to increase its share of ultimate recovery from the field by 450 million barrels of oil equivalent and increase daily net production from 125 million to 250 million standard cubic feet per day by the end of the decade. The $2.2 billion outlay includes the drilling of 2,000 wells over the next 15 years and a two-year, $120 million technology field trial program which could lead to additional field development in the future. Bois d'Arc Energy ( BDE) said it resumed drilling after its operations had been disrupted by Hurricanes Rita and Katrina. The company drilled three additional successful wells and one dry hole since reporting its second quarter results.