Energy stocks trade mostly higher as Wall Street improves

The Amex Oil Index rose 0.3% to 1,151.25 points as the price of a barrel of crude slipped 18 cents to $61.64. The Amex Natural Gas Index fell 0.1% to 452.93 points as natural-gas futures fell 1.7% to $7.23 per million British thermal units.

Natural gas inventories fell 102 billion cubic feet for the week ended March 2, the Energy Department reported earlier. That compares with a drop of 97 billion cubic feet a year ago and a five-year average decline of 117 billion cubic feet.

The Philadelphia Oil Service Index (Philadelphia: - ) rose 1.1% to 203.36 points as investors poured back into a sector that some analysts believe have been too harshly hit during the recent sell off.

The recent volatility in energy-sector shares stresses the importance of wise stockpicking rather than rushing into an entire sector, said Dan Pickering of Pickering Energy Partners.

"We forced ourselves to take a step back and assess what's actually working (and what isn't) in energy space so far this year," said Pickering in a pre-market note to clients. "Summary observation -- stockpicking critical, downstream on fire, land/offshore drillers bringing up rear. Action items -- time to add to offshore drillers (too beaten up this year)."

Noble Corp. (NYSE: - ), an offshore driller with a what he called a "great" mix of assets and geographic exposure, is off 7% this year, Pickering said. Shares of Noble rose 2.8% to $72.88.

Moreover, Pickering said he recommends Baker Hughes Inc. (NYSE: - ) and Anadarko Petroleum Corp. (NYSE: - ) for patient investors willing to stomach the sector's volatility over the next year. Shares of Baker Hughes, which got slammed earlier this year after disappointing earnings results, are down 13% so far this year.

Within the oil index, Marathon Oil Corp. (NYSE: - ) led the advance, rising 1.2% to $94.15. Repsol (NYSE: - ) picked up 1.2% to $31.22.

Industry leader Exxon Mobil Corp. (NYSE: - ) rose 0.3% to $71.85 after spending much of the session in the red.

In the news, Chevron Corp. (NYSE: - ) and ConocoPhillips (NYSE: - ) agreed to handover their majority stakes in multi-billion dollar heavy-oil projects in Venezuela's Orinoco Basin by May 1.

Earlier this year, Venezuela's President Hugo Chavez announced the state would assume 60% stakes in projects currently being led by foreign oil companies as he moved towards his goal of nationalizing the few remaining pockets of private industry in the country.

Exxon Mobil was the first to confirm this week it has agreed to cede its majority interest to Venezuela's state-owned oil company Petroleos de Venezuela S.A., or PDVSA.