Reports that President Barack Obama is open to expanding drilling in the Gulf of Mexico and the east coast of the United States, is having a muted impact on energy stocks on Wednesday morning.
According to the Wall Street Journal: "The Obama administration will propose allowing offshore oil and natural-gas exploration and development in a large swath of the eastern Gulf of Mexico, after months of criticism from Republicans who have made expanded offshore drilling a political rallying cry.
"In addition, the administration plans to announce new steps to determine how much oil and natural gas is buried off the coasts of Middle and Southern Atlantic states."
Of course, it can be a little difficult to separate the causes here. The price of crude oil traded on Wednesday morning at $83.40 (U.S.) a barrel, up $1.03, amid a general rise in commodity prices as the U.S. dollar falls.
That is generally a good thing for energy stocks, regardless of a shift in U.S. exploration policy. In the U.S. energy stocks were up 0.3 per cent while Canadian energy stocks were up 0.2 per cent.
Barron's Stocks To Watch Today blogger looked at the companies that have emerged as the top bidders in the U.S. government's auction of drilling rights in the Gulf, but these stocks aren't going gangbusters. These names include Nexen Inc., Anadarko Petroleum Corp., Chevron Corp. and Hess Corp.
David Berman