Energy Sector Roundup: Supply Worries

Following is a summary of top stories in the energy sector Monday afternoon.

Chavez and Refinery Problems Push Up Oil

Oil futures shot higher for the third straight session on supply concerns. Along with the latest threat from Venezuela President Hugo Chavez to cut off oil to the U.S., power outages at a Valero Energy Corp. refinery in Delaware City, Del., and a Citgo Petroleum Corp. refinery in Lake Charles, La., pushed prices higher.

Light, sweet crude for March delivery jumped $1.82 to settle at $93.59 a barrel on the New York Mercantile Exchange after spiking to $94.72 earlier, a one-month high.

Other energy futures climbed as well. March heating oil futures rose 5.03 cents to settle at $2.6044 a gallon on the Nymex, and March gasoline futures added 3.9 cents to settle at $2.3962 a gallon.

Chavez Oil Cutoff May Be a Hollow Threat

Venezuela President Hugo Chavez's threat to cut off oil sales to the U.S. makes for provocative headlines, but analysts say it presents no real danger to global oil supplies or prices. They also think it doesn't makes much economic or political sense.

Chavez on Sunday threatened to cut off oil sales to the U.S. in retaliation for court orders freezing assets belonging to Venezuela's state oil company after Exxon Mobil Corp. challenged the nationalization by the Venezuelan government of a multibillion-dollar oil project. A British court last week issued an injunction freezing as much as $12 billion in Petroleos de Venezuela SA's assets.

"It would be the worst time politically for Chavez to cut oil shipments to the U.S.," said Patrick Esteruelas, Latin America analyst at the Eurasia Group in New York.

If Chavez did cut off oil to the U.S., the effect would be like "a shovel in the ocean" because the U.S. would purchase what it needs from sources in the Middle East or elsewhere, said Peter Beutel, oil analyst at Cameron Hanover in New Canaan, Conn.

Chavez has repeatedly threatened to cut off oil shipments to the U.S., if Washington tries to oust him. Many observers don't think that's very likely with opposition to Chavez growing at home.

Chevron Headed Back to the Dow Jones Average

Chevron Corp. and Bank of America Corp. will replace diversified manufacturer Honeywell International Inc. and Altria Group Inc. on the Dow Jones Industrial Average, according to the Wall Street Journal. The change takes effect Feb. 19, and the value of the Dow will be adjusted before the start of that day's trading.

The Journal said that financial and oil and gas industries were underrepresented on the blue chip index.

Altria is being removed because last year's spinoff of Kraft Foods and the upcoming spinoff of the Philip Morris International business reduced it to a U.S. tobacco company. Honeywell was described as the smallest of the industrials, and those companies have become less important in the overall stock market.

Chevron was a Dow component as Standard Oil Co. in the mid-1920s for about 18 months. It returned to the index in 1930, but was dropped in 1999 as part of a change that brought Microsoft Corp., Intel Corp. and SBC Communications Inc. _ later AT&T Inc. _ to the Dow.

ConocoPhillips Spent $4 Million on Lobbying Last Year

ConocoPhillips spent more than $1.8 million in the second half of 2007 to lobby the federal government, according to a disclosure form.

The company lobbied on numerous issues and legislation related to climate change, energy, trade agreements and licensing and permitting, according to a disclosure form posted online Feb. 4 by the Senate's public records office. The company also spent more than $2.2 million in the first six months of 2007 to lobby on largely the same matters.

Beside Congress, ConocoPhillips lobbied numerous agencies, including the Minerals Management Service, Interior and State departments, National Security Council, Environmental Protection Agency and others.

JPMorgan Sees Stronger Oil Tanker Market

The oil tanker spot market will be stronger than previously forecast, mostly due to a higher rate of ship conversions, according to JPMorgan analyst Jonathan B. Chappell. He says more companies are converting ships into other, more profitable trades, and demand will increase for the remaining tankers.

He expects tanker stocks to rise though the first half of the year, especially considering the "near-record" rates in the first quarter. But Chappell thinks the tanker market to slow when more tankers are built next year.

He upgraded General Maritime Corp. to "Overweight" from "Neutral," saying the company can take advantage of the improving rate environment. But he downgraded Arlington Tankers Ltd. to "Underweight" from "Neutral" and Tsakos Energy Navigation to "Neutral" from "Overweight," suggesting they have little room for growth.

Overseas Shipholding Group, Teekay Corp. and Ship Finance International Ltd. are Chappell's top picks in the sector.

In afternoon trading, General Maritime Corp. rose $1.01, or 4 percent, to $26.52.

Arlington Tankers, Ltd. lost 52 cents, or 2.5 percent, at $20.35, while Tsakos Energy Navigation fell $2.16, or 6.1 percent, to $33.14. Overseas Shipholding Group gave up 33 cents to $63.71, and Teekay was unchanged at $45.10.

--Compiled by AP Business Writer Greg Stec. Questions or comments can be directed to gstec@ap.org.