Weekly inventory data and a full plate of earnings from Hess Corp. and EOG Resources loomed in the energy sector on Wednesday, as oil prices traded near $122 a barrel and shares dithered ahead of key weekly inventory data.

Crude futures subtracted 36 cents to $121.83 a barrel, even as the broad market provided a lift.
The Amex Oil Index (XOI: 1,324.38, +32.64, +2.5%) rose fractionally to 1,292. Component BP (BP: 60.89, +0.65, +1.1%) rose 29 cents to $60.53 after it was upgraded to a buy at Citigroup. Exxon Mobil (XOM: 82.03, +1.13, +1.4%) fell 9 cents to $80.81 a day ahead of its second-quarter earnings update.
The Philadelphia Oil Service Index ($OSX: 309.94, +7.62, +2.5%) dipped fractionally at 302.

The Amex Natural Gas Index (XNG: 589.22, +8.79, +1.5%) rose 0.3% to 582, adding to losses in the previous session. Commenting on the inventory levels of gasoline, TPH Energy Research labeled the summer of 2008 as the driving season that wasn’t. “At this point in summer, gasoline/distillate should be drawing one to two million barrels a week as people happily take vacations in Wagon Queen Family Truckster,” TPH Energy said in a note to clients. “Instead, price up, demand down and Little Joey gets extra time with Xbox.”

Hess Corp. (HES: 100.45, +6.20, +6.6%) on Wednesday said second-quarter net income rose to $900 million, or $2.76 a share, from $557 million, or $1.75 a share, in the year-ago period. Oil and gas production rose 4% to 393,000 barrels a day from 378,000 barrels a day. Wall Street expected Hess Corp. to earn $2.62 a share, according to a survey by FactSet Research. Shares fell 1% to $93.30.

EOG Resources (EOG: 101.23, +1.22, +1.2%) reported second-quarter net income of $2.52 a share, ahead of the Wall Street target of $2.35 a share. The company said natural gas equivalent volumes increased to 174.4 Bcfe from 155.8 Bcfe. EOG reiterated its target of 15% total company organic production growth for 2008. The Houston energy firm increased its quarterly dividend payment by 12.5% to 13.5 cents a share. Shares fell 1.5% to $98.56.

Noble Energy Inc. (NBL: 74.00, -0.62, -0.8%) said it swung to a second-quarter loss of $144 million, or 84 cents a share, from a profit of $209 million, or $1.21 a share, in the year-ago period. On an adjusted basis, Noble said it earned $1.93 a share, while analysts polled by FactSet Research were looking for, on average, earnings of $2.07 a share. Shares fell 1.8% to $73.30.

Cameron (CAM: 47.89, +1.31, +2.8%) said second-quarter net income rose 23% to $152 million, or 65 cents a share, from $123.2 million, or 54 cents a share, in the year-ago period. The Houston oil services firm said revenue increased 30% to $1.5 billion. Gains in the company’s sub-sea and drilling product lines drove profit growth, the company said. Analysts surveyed by FactSet Research forecast earnings of 61 cents a share on revenue of $1.36 billion. Shares rose 30 cents to $46.88.

Source: MarketWatch | By Steve Gelsi

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