SAN FRANCISCO (MarketWatch) -- Oil and natural-gas stocks gave up some of their early gains Wednesday, pressured by bearish inventories data, but the sector remained in positive territory as oil-service stocks led the rebound from the previous session's steep selloff.
Noble Corp. (NE 31.51, +0.63, +2.02%) paced the percentage gainers, its shares up 4% at $31.10, after FBR Capital Markets raised the company's rating to outperform from market perform previously.
Shares of Oceaneering International (OII 45.44, +0.40, +0.88%) , Halliburton (HAL 24.55, +0.07, +0.29%) and Baker Hughes (BHI 41.58, +0.74, +1.81%) also were doing well, with all three holding gains of at least 3%.
Meanwhile the NYSE Arca Oil Index (XOI 883.62, -6.53, -0.73%) was hanging onto a 0.5% advance at 895 points, with 11 of its 13 components trading higher.
Hurricane Alex's big waves in TexasThe storm became the first hurricane of the 2010 season threatening both Mexico and Texas with sustained winds of 75 mph.
BP PLC (BP 28.98, +0.10, +0.35%) (UK:BP. 318.35, +15.45, +5.10%) topped the percentage gainers, up 3% at $28.48, as investors continued to ponder whether the company might be considered a takeover candidate.
Industry analysts have examined the possibility of Royal Dutch Shell PLC (RDS.A 50.31, +0.05, +0.10%) or Exxon Mobil Corp. (XOM 57.07, +0.12, +0.21%) taking advantage of BP's depressed share price to mount a takeover campaign. BP's shares have lost half their value since the deadly Deepwater Horizon accident and oil spill in April.
Some analysts dismiss a BP takeover scenario as unlikely, however, citing regulatory hurdles and a reluctance to take ownership of BP's vast downstream refining properties -- far less attractive than its upstream portfolio of oil and gas fields. See more on trials and tribulations affecting BP's network of service stations.
BP's gains also follow Hurricane Alex's continued westerly course toward the Mexico-Texas border, away from most of the Gulf of Mexico's oil and gas fields. The storm is forecast to make landfall late Wednesday or early Thursday. Read more about Hurricane Alex.
The NYSE Arca Natural Gas Index (XNG 482.10, -3.79, -0.78%) gained 1% to hit 490.54 points.
In energy futures, crude oil for August delivery was last down $1.01 a barrel at $74.90 on the New York Mercantile Exchange. The contract retreated after the Energy Information Agency reported U.S. crude inventories fell 2 million barrels from the previous week, roughly in line with analysts' expectations.
But the report also showed a bearish 500,000-barrel buildup in U.S. gasoline inventories last week while distillates rose 2.5 million barrels, both indications of weak consumer fuel demand.