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Chesapeake, Tesoro lead energy stock gains

NEW YORK (MarketWatch) -- Chesapeake Energy Corp. gained on the heels of bullish second-quarter results and Tesoro Corp. moved up along with California gasoline prices, as energy stocks advanced with the broad equities market on Tuesday.

Rising oil prices provided support for energy stocks, as crude futures jumped nearly 2% to their highest levels in three months. See Futures Movers for more on commodity prices.

In California, wholesale gasoline prices spiked as much as 31 cents a gallon in the San Francisco Bay area and 26 cents a gallon in Los Angeles, after a fire at Chevron's Richmond, Calif., refinery knocked out Unit 4 of the facility.

"All of these increases have occurred today and it puts $4 a gallon retail gasoline back in play for a large portion of the state," said Tom Kloza of the Oil Price Information Service..

At the closing bell, Exxon Mobil Corp. (XOM) moved up by 0.5% and Chevron Corp. (CVX) rose about 0.6%. The two oil majors are components of the Dow Jones Industrial Average (DJIA) , which rose 51 points.

Among stocks in the spotlight, Chesapeake Energy Corp. (CHK) rallied 9.4% after the company's second-quarter profit nearly doubled to $929 million, or $1.29 a share, from $467 million, or 68 cents a share, in the year-ago period.

"Despite some moving parts, Chesapeake reported strong second-quarter earnings," analysts at Sterne Agee said in a note to clients. "Operational momentum across the liquids-rich portfolio and bullish commentary on third-quarter asset sales should support the stock."

Nexen Inc. (NXY) rose 0.4% as its proposed $15 billion acquisition by Chinese energy giant CNOOC Ltd's (CEO) drew criticism from a key Republican.

"I have serious national security concerns with the Chinese government, acting through one of its corporations, purchasing a company that will give it control over significant U.S. oil and gas resources," U.S. Sen. James Inhofe, Republican from Oklahoma, told MarketWatch in an emailed statement. See related story

Also in the spotlight, Tesoro Corp. (TSO) rose 5%. Analysts at Tudor Pickering said a refinery fire at a Chevron Corp. (CVX) facility in California could benefit the company. Chevron said its crude unit is down at its 245,000 barrel a day refinery in Richmond.

Tesoro operates two refineries in California and one in Washington State.

Chevron spokesman Lloyd Avram said Chevron is "assessing production implications" of the fire but the company has no further details to share at this time.

Among energy sector benchmarks, the NYSE Arca Oil Index (XOI) added 1.7%, the NYSE Arca Natural Gas Index (XNG) advanced by 2.4% and the Philadelphia Oil Service Index (OSX) moved up by 1.2%.

The Energy Select Sector SPDR Fund(XLE) , which includes energy stocks contained in the S&P 500, rose 1.5%.

Also on the rise, First Solar Inc. (FSLR) jumped 8.5% and Cabot Oil & Gas(COG) rose 5%.