Oil prices rally, energy sector follows; JCPenney bonds up big on improved holiday sales

By Stephanie N. Rotondo

Phoenix, Jan. 7 – Distressed debt investors were “very active in oil and gas,” a trader said Wednesday, as oil prices rallied a bit.

The price of oil was rebounding during the session, but it did lose some of those gains by the bell. In fact, Brent crude oil finished in the red, declining 29 cents to $50.81 per barrel for February deliveries.

West Texas Intermediate crude meantime gained 43 cents to $48.36.

With oil prices looking to stage a comeback, the oil and gas sector continued to be in focus in midweek trading.

One trader said that California Resources Corp.’s 6% notes due 2024 were particularly active, with almost $30 million in trades.

Among independent oil producers, Linn Energy LLC’s 8 5/8% notes due 2020 were deemed up over a point at 88¼, while the 7¾% notes due 2021 gained almost 2 points, closing around 85¾.

Halcon Resources Corp.’s bonds finished at least 2 points better day over day, according to a trader.

While some oil and gas names did see decent gains in the wake of the oil increase, it was J.C. Penney Co. Inc. that was the day’s big mover.

Late Tuesday, the company said same-store sales for the nine-week holiday period were up 3.7% year over year. Come Wednesday, the company’s debt was trading up as much as 5¾ points.

The equity also popped, rising over 20% on the day.

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