Shares of oil companies rose on Friday along with the broader market after crude prices rebounded from an earlier slide.
Crude oil prices rose 70 cents, or 1.4 percent, to $50.10 on Friday, a day after prices crossed below the $50 threshold and hit the lowest point since March 2005. Crude prices have tumbled, shedding two-thirds of its value since July.
Shares of Exxon Mobil Corp., the world's largest publicly traded oil company, rose $6.22, or 9.2 percent, to $74.90. Shares of Marathon Oil Corp. gained $2.54, or 13 percent, to $22.17.
This could be the cautious start of an upswing for oil companies, said Fadel Gheit, an analyst with Oppenheimer & Co., in a phone interview.
"You don't chase oil stocks when they're rising, but now, when the bubble bursts, you buy oil stocks," he said, adding that this is the message he's been sending for weeks. But up through yesterday, investors had been unloading shares of oil companies, a trend that has lasted several months and one that Gheit describes as "totally irrational."
"Energy is the backbone of the global economy," he said. "Oil (companies) are not going to go out of style. Oil companies have physical assets. They'll be worth something for somebody."
Meanwhile on Wall Street the Dow Jones industrial average rose over 340 points, or 4.8 percent, to 7,911.42. The S&P 500 rose 32.36 points, or 4.2 percent, to 783.57.
Elsewhere in the sector shares of Chevron Corp. gained $4.03, or 6.3 percent, to $68.57. ConocoPhillips shares lifted $3.43, or 8.2 percent, to $45.23. Valero Energy Corp. shares jumped $1.92, or 13.9 percent, to $16.
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