By Steve Gelsi, MarketWatch
|Reuters: Fire boat response crews battle the blazing remnants of the offshore oil rig Deepwater Horizon off Louisiana in this April 21, 2010 handout file photo. The federal government may seek $25 billion from BP.|
NEW YORK (MarketWatch) — Sliding oil prices and a late-day sell-off in the broad equities market pushed down energy stocks on Monday, while Progress Energy and BP PLC held on to gains from earlier in the session.
Exxon Mobil Corp. gave up 0.7% while Chevron Corp. declined by 0.9%. The two oil majors are components of the Dow Jones Industrial Average, which fell 143 points.
Also setting a somber tone for energy stocks, crude oil futures dropped below $83 a barrel.
Bucking the trend, U.S.-listed shares of BP PLC rose 0.5%. Federal regulators are seeking a settlement of $15 billion to $25 billion from the oil major for the 2010 oil spill in the Gulf of Mexico from the ruptured Macondo well, according to report by the Financial Times over the weekend.
Analysts at Tudor Pickering Holt said the $25 billion figure is above what they have assumed BP’s liability would be under the Clean Water Act.
“It is encouraging that a dialogue with the U.S. government appears to be open/ongoing and removal of the threat of criminal prosecution would be helpful to BP shares,” analysts said.
Progress Energy rose 2.5%. The company said its purchase by Duke Energy is expected to close on time by July 1 after a favorable ruling from the Federal Energy Regulatory Commission. The federal regulatory body approved the deal with some conditions. Progress Energy said the ruling marked a “major milestone” for the merger.
Among the major benchmarks in the energy sector, the NYSE Arca Oil Index dipped 1.1%, the NYSE Arca Natural Gas Index dropped 1.9% and the Philadelphia Oil Service Index dipped 1.9%.
Energy stocks in the S&P 500 fell 2%, on average, at the closing bell.
Weighing on the sector, Alpha Natural Resources moved down 9%; Newfield Exploration Co. lost 5.6% and Peabody Energy lost about 4.7%.
On the plus side, Scana Corp. rose 0.8%, Phillips 66 moved up by 1.5% and Valero Energy Corp. advanced by 2.7%.
Steve Gelsi is a reporter for MarketWatch in New York.