Big Oil stocks (finally) feel the love from record crude prices

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Oil at another record high? Ho-hum.

Oil stocks at record highs? Now that’s news, believe it or not.

The XOI index of 13 major oil companies today finally has topped its record closing high of 1,577.49 set on Dec. 28. The XOI was trading at 1,582 at about 11:15 a.m. PDT, up 1.6% from Thursday’s close, as crude oil futures in New York rose as high as $127.82 a barrel.

Among the stocks in the XOI reaching their personal bests today: Chevron, up $1.20 to $99.69; ConocoPhillips, up $1.93 to $91.24; and Occidental Petroleum, up $3.24 to $94.07.

Not yet on that list: ExxonMobil, which is up 89 cents to $92.19 but still is below its all-time closing high of $95.05 set on Oct. 18.

Although the price of crude has rocketed more than 30% this year, major oil stocks haven’t kept up -- maybe because investors have been incredulous that the price spike could keep going.

Oil stocks tumbled at the start of the year as crude prices fell on fears that the U.S. economy was headed for a painful recession. Even as crude recovered in February and March, the XOI index made no net progress. One issue has been the squeeze on the refining portion of the business. (Just ask leading refiner Valero Energy, whose shares last week hit a 52-week low.)

Since the start of April, however, many investors have stopped doubting the oil stocks. Chevron is up less than 7% since Dec. 31, but it’s up almost 17% since March 31. ConocoPhillips has gained just 3% for the year, but it’s up more than 19% since March 31.

The contrarian view of the new high in the XOI index would be that investors are getting on board just as the price of oil is, at last, peaking out.

Then again, did you hear the Saudi oil minister, Ali al-Naimi, today? The Associated Press quotes him saying there is no need for the kingdom to boost production further, after a modest increase in output last week. ‘Supply and demand are in balance today,’ he told a news conference in Riyadh, where President Bush is visiting King Abdullah this weekend. ‘How much does Saudi Arabia need to do to satisfy people who are questioning our oil practices and policies?’