Energy outperforms as better-bid convertibles market trades mostly in line; Whiting gains

By Rebecca Melvin

New York, March 2 – Energy convertibles continued to improve on Wednesday as the price of oil edged up again and energy shares bounced.

“I don’t know if it’s short covering or what, but energy is having a bounce,’’ a Connecticut-based convertibles trader said.

Whiting Petroleum Corp.’s 1.25% convertibles jumped another 3 points to trade at 43 near the end of the session. The bonds had gone out at 40 on Tuesday and were in the middle 30s last week. Shares of the Denver-based energy exploration and production company surged 85 cents, or 19.5%, to $5.20 on Wednesday.

Cobalt International Energy Inc.’s convertibles were also up a couple of points as shares of the Houston-based energy exploration and production company gained 9.5% to $3.00.

Chesapeake Energy Corp.’s convertibles jumped about 3 points on average with the Chesapeake 2.25% convertible bond up 5 points on the day, a trader said. Shares of the Oklahoma City-based natural gas company gained another 23% to $3.40 on Wednesday after climbing 24% on Tuesday.

Volumes were light in energy trades, however, the trader said.

The news that Aubrey McClendon, a founder and former chief executive of Chesapeake, died Wednesday in a fiery car crash the day after he was indicted on bid rigging charges didn’t have any influence on market moves, a trader said.

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