SAN FRANCISCO - U.S. energy stocks took another beating on Thursday as oil and natural gas prices tumbled and analysts reeled in expectations for next year after a warning from the world's largest oil services company.
Analysts said any energy companies hoping to rely on international demand to see them through the U.S. slump were now looking at weaker demand across the board.
U.S. crude oil futures fell to their lowest level in nearly four years on demand worries, as the world's leading economies grind through a recession.
Natural gas futures tumbled 6 percent to a 14-month spot low after a bearish inventory report.
"It's become now more the question of the onslaught of negative news here pointing to a deeper and deeper recession," BMO Capital Markets analyst Jim Byrne said.
"At $45, $40 oil you're going to see a significant pullback in activity, which in our view will ultimately lead to recovery, but it appears that we're going to go through a little bit longer downturn than anticipated," he added.
Schlumberger Ltd, deemed an energy business bellwether because it provides services across the industry, had said on Wednesday that this year's profit would miss Wall Street forecasts, leading to worries about 2009.
"Signs of weakness are beginning to emerge in Schlumberger's international business and we now expect to see lower revenue there in 2009," Barclays Capital analyst James Crandell said in a research note, though he said the industry leader would benefit from its strength through the downturn.
Shares of Schlumberger were down 4 percent to $40.83 on Thursday afternoon, after touching a three-year low of $38.64 on Wednesday. Rival Halliburton Co (HAL.N: Quote, Profile, Research, Stock Buzz) fell even harder, by 7.6 percent to $13.96, within sight of its lowest level for more than four years, $13.22. The Philadelphia oil services index plunged by nearly 8 percent.
The drop in the price of natural gas dealt another blow to an already-besieged sector. The American Stock Exchange index of natural gas companies .XNG fell 8.8 percent.
Leading player Chesapeake Energy Corp, which has already seen its shares drop due to its announcement about a possible share issue last week, fell another 13 percent to $12.23.
Analysts said any energy companies hoping to rely on international demand to see them through the U.S. slump were now looking at weaker demand across the board.
U.S. crude oil futures fell to their lowest level in nearly four years on demand worries, as the world's leading economies grind through a recession.
Natural gas futures tumbled 6 percent to a 14-month spot low after a bearish inventory report.
"It's become now more the question of the onslaught of negative news here pointing to a deeper and deeper recession," BMO Capital Markets analyst Jim Byrne said.
"At $45, $40 oil you're going to see a significant pullback in activity, which in our view will ultimately lead to recovery, but it appears that we're going to go through a little bit longer downturn than anticipated," he added.
Schlumberger Ltd, deemed an energy business bellwether because it provides services across the industry, had said on Wednesday that this year's profit would miss Wall Street forecasts, leading to worries about 2009.
"Signs of weakness are beginning to emerge in Schlumberger's international business and we now expect to see lower revenue there in 2009," Barclays Capital analyst James Crandell said in a research note, though he said the industry leader would benefit from its strength through the downturn.
Shares of Schlumberger were down 4 percent to $40.83 on Thursday afternoon, after touching a three-year low of $38.64 on Wednesday. Rival Halliburton Co (HAL.N: Quote, Profile, Research, Stock Buzz) fell even harder, by 7.6 percent to $13.96, within sight of its lowest level for more than four years, $13.22. The Philadelphia oil services index plunged by nearly 8 percent.
The drop in the price of natural gas dealt another blow to an already-besieged sector. The American Stock Exchange index of natural gas companies .XNG fell 8.8 percent.
Leading player Chesapeake Energy Corp, which has already seen its shares drop due to its announcement about a possible share issue last week, fell another 13 percent to $12.23.
