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Gold/Mining/Energy : Valero Energy -- Ignore unavailable to you. Want to Upgrade?

To: Ram Seetharaman who wrote (2)	9/25/2000 2:08:33 PM
From: Ram Seetharaman	Read Replies (1) \| Respond to of 7

Buy VLO on dips, they say - Monday September 25 12:27 PM ET Energy Company Shares Undercut NEW YORK (Reuters) - U.S. energy stocks slumped on Monday as oil prices were roughed up by the decision to release 30 million barrels of crude from the nation's Strategic Petroleum Reserve. The announcement by Energy Secretary Bill Richardson late on Friday that the government would tap the 571 million barrel reserve for the first time since Iraq's invasion of Kuwait in 1990, sent oil futures in New York tumbling as much as $1.58 to $31.10 a barrel on Monday. But since Thursday's call by Democratic presidential nominee Al Gore (news - web sites) for the administration to tap the SPR, crude's losses have topped $4.00. Richard Bernstein of Merrill Lynch said in a research note that the fall in oil shares should be expected to follow suit after the decision to pull oil from the reserve, and, indeed, energy companies were down across the board in the stock market. For major international oil companies, the share drop continues to decline that started a week ago, after a rare late summer surge. Between July 25 and September 18, the Standard & Poor's index of international oil companies rose more than 15 percent from 894 to 1,034 points. Since then, the index has steadily declined, and with components such as Exxon Mobil Corp. (NYSE:XOM - news), Chevron Corp. (NYSE:CHV - news), and Texaco Inc. (NYSE:TX - news) all suffering more losses on Monday, the index dropped back to 971 points, down 20 points. Shares of Exxon Mobil, the No. 1 U.S. oil company, fell $1-7/16 to $84-3/4 on the New York Stock Exchange (news - web sites), while Chevron fell $1-1/16 to $82-15/16 and Texaco lost $1-1/8 to $49-13/16. The Dow Jones industrial average, meanwhile, was up 22.57 points, or 0.21 percent, at 10,869.94. Banc of America analyst Tyler Dann, however, said that any near term weakness caused by the drop in crude oil prices could make some of the oil stocks attractive buys. He advised using any continued weakness to focus on stocks such as Chevron, Exxon Mobil, Conoco Inc. (NYSE:COCb - news), and refining company Valero Corp. (NYSE:VLO - news). Dann also cautioned that supply and demand fundamentals in the crude oil market were still supportive of stronger-than-normal prices. ``Fundamentals still lead us to be more bullish than bearish on crude prices in the intermediate term, but the prospect of additional government intervention gives us pause,'' he said, adding that he is maintaining his price forecast for benchmark West Texas Intermediate at $27 a barrel for the fourth quarter and. ``We believe that stronger than expected industry fundamentals should continue into 2001, and that estimates and stock price will ultimately reflect that trend,'' he said. Still, investors looked less bullish on the industry, with shares of exploration companies, oil service firm, and refiners joining the major oil companies in their slump. Houston-based Apache Corp. (NYSE:APA - news) was among the hardest hit of the exploration companies, falling $2-1/4 to $56-7/8 on the New York Stock Exchange. Among the refining companies, Ultramar Diamond Shamrock was down 11/16 at $24-9/16 and Tosco Corp. lost 9/16 to $29-1/2. Oil service and drilling giants Halliburton Co. (NYSE:HAL - news) and Schlumberger Ltd. (NYSE:SLB - news) fell $1-1/16 to $46 and $1-7/8 to $77-5/16, respectively, on the New York Stock Exchange.