Oils. reversal to longs working fine so far..
NEW YORK (CBS.MW) -- Oil stocks jumped almost 4 percent Thursday after the American Petroleum Institute reported a decline in crude inventories for the third straight week, a move that saw oil prices briefly rise above $20 a barrel.
The Philadelphia Oil Service Index ($OSX: news, msgs) rose 3.9 percent, led by R & B Falcon (FLC: news, msgs), which rose 1/4 to close at 9 5/16, Baker Hughes (BHI: news, msgs), up 1 3/8 to 33 5/8 and Smith International (SII: news, msgs), which gained 1 3/4 to 43.
The American Petroleum Institute said crude inventories sank 1.9 million barrels to 327.9 million last week. Analysts had anticipated a 500,000 barrel to 1.8 million barrel rise in stocks.
"This is the third big drop in crude stocks in a row," said Phil Flynn, senior market analyst and vice president of Alaron Trading, which points to a trend in the market and shows that the energy sector is "starting to catch up to the OPEC cuts." It also implies a good increase in demand, Flynn said.
Also late Wednesday, Venezuela's energy and mines minister said OPEC and producers that aren't part of the cartel have achieved 95 percent compliance with the 5 million barrel-per-day reduction in oil output pledged in 1998 and 1999.
Venezuela also reported 100 percent compliance with its 650,000 barrel per day production cut, according to Bridge News.
August crude oil, which hit $20.20 a barrel in early trading, dipped 6 cents to $19.71 on the New York Mercantile Exchange.
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