SECTOR COMMENTARY

The energy sector ended the day lower, trailing the broader equity markets which also saw steep declines today. Last week’s outperformers, refiners and drillers, saw the largest selloff with E&Ps and integrateds following closely behind. Weakness was seen across the markets ahead of the start of earnings season and a busy week on the economic front as investors are looking for further guidance to weigh against a string of recent weak data.

WTI crude oil futures ended the session lower by $0.92 or 0.99% at $91.80, trailing Brent futures which were down roughly 0.65% in late afternoon trading. Continued concerns over high supplies and record production in the U.S. and weak economic data last week, weighed on prices today. Traders will be paying close attention the weekly inventory data which a preliminary Reuters poll of analysts is expected to show crude oil inventories likely rose last week for the first time in seven weeks. Brent futures saw additional pressure from the interim agreement to limit Iran's nuclear program fueled expectations that the country's crude-oil exports could increase, adding to global supplies. The sharper drop in the U.S. benchmark sent Brent's premium to U.S. oil to more than $15 for a second time in six weeks.

Natural gas futures rallied $0.221 or 5.45% to end the day at $4.274, erasing steep losses from last week. Prices started the day strong and continued to gain momentum following revised forecasts now calling for cooler than originally expected temperatures in key consuming regions that should draw down supplies.

U.S. INTEGRATEDS

Press Release - Chevron Corporation announced that its U.K. subsidiary, Chevron North Sea Limited, has reached a final investment decision and received approval from the U.K. government to proceed with the development of the Alder Field in the Central North Sea. The project has a planned design capacity of 110 million cubic feet of natural gas and 14,000 barrels of condensate per day. First production is expected in 2016.

INTERNATIONAL INTEGRATEDS

Reuters - BP-Husky Refining LLC, a partnership between BP Plc and Husky Energy Inc, reported a leak in a fitting causing release of material at its 135,000 barrel-per-day Oregon refinery in Toledo, Ohio, according to a filing with regulators.

(Saturday) Reuters - One of BP Plc's attempts to curb payouts for what it says are "fictitious" and "absurd" claims related to the 2010 Gulf of Mexico oil spill has failed after a legal appeal was rejected by a U.S. court.

(Saturday) Reuters - Italian energy company Eni has closed a pipeline in Nigeria due to sabotage, cutting off 3,500 barrels per day of its share of oil output, the company said.

(Late Friday) Reuters - A panel of the 5th U.S. Circuit Court of Appeals on Friday affirmed a federal judge's approval of a multi-billion dollar settlement between BP Plc and businesses and individuals who lost money and property in the 2010 Gulf of Mexico oil spill.

Reuters - Russia's No.2 oil producer Lukoil saidit had managed to reverse a prolonged decline in oil production last year, increasing output by 1 percent to 90.8 million tonnes (1.8 million barrels per day).

Reuters - Salym Petroleum Development, a Russian joint venture betweenRoyal Dutch Shell and Gazprom Neft said it had started oil fracking in Siberia, a technology seen as key to Russia maintaining its level of oil production.

Reuters - Total has become the first major oil and gas company to strike a deal to explore for shale gas in Britain, boosting a technology which has brought cheap energy to the United States but which is bitterly opposed by environmentalists.

CANADIAN INTEGRATEDS

Reuters - BP-Husky Refining LLC, a partnership between BP Plc and Husky Energy Inc, reported a leak in a fitting causing release of material at its 135,000 barrel-per-day Oregon refinery in Toledo, Ohio, according to a filing with regulators.

Reuters - Husky Energy Inc said operations at its 155,000-barrel-per-day (bpd) Lima, Ohio, refinery were suspended due to a power outage that occurred on Sunday.

U.S. E&PS

BMO Capital initiated coverage on Continental Resources with a ‘Outperform’ rating.

Press Release - Laredo Petroleum, Inc. announced that it intends to offer $350 million in aggregate principal amount of senior notes due 2022 in a private placement to eligible purchasers. The Company will use the net proceeds of the offering, if completed, for general working capital purposes. The senior notes will be senior unsecured obligations of the Company and will be guaranteed on a senior unsecured basis by the Company's existing subsidiary and all of its future subsidiaries, with certain exceptions.

CANADIAN E&PS

Press Release - AltaGas Ltd. announced that it has completed its aggregate $300 million issue of senior unsecured medium term notes (collectively, the "Offering"), specifically: $200 million medium term notes with a coupon rate of 4.40 percent, maturing on March 15, 2024; and $100 million medium term notes with a coupon rate of 5.16 percent, maturing on
January 13, 2044.

Reuters - A small leak at Canadian Natural Resources' Primrose field in the Alberta oil sands continues to seep bitumen crude 10 days after it started, the head of the company said.

Reuters - Canadian Oil Sands Ltd expects to start maintenance on a major bitumen upgrader towards the end of the second quarter, Chief Executive Ryan Kubik said on Monday, with the work expected to take around three months.

Press Release - Cub Energy Inc. announces fourth quarter operational update including the seventh consecutive quarter of production growth, record quarterly production and a 2013 exit rate of approximately 2,070 barrels of oil equivalent ("boe/d") (a 35% increase over the Company's 2012 exit rate).

Reuters - Canadian oil firm Pacific Rubiales launched a tender to sell one 1 million barrel cargo of heavy Colombian Castilla crude, for delivery February 1 to 5 at Covenas port, according to an invitation seen by Reuters.

OIL SERVICES

Cowen & Co downgraded Baker Hughes to ‘Market Perform’ from ‘Outperform’.

ISI downgraded Dril-Quip Inc and Hornbeck Offshore Services to ‘Buy’ from ‘Strong Buy’.

ISI downgraded Gulfmark Offshore Inc to ‘Neutral’ from ‘Buy’.

ISI downgraded Cameron International, FMC Technologies andOceaneering International to ‘Neutral’ from ‘Strong Buy’.

(Late Friday) Press Release - Vantage Drilling Company announced that Sigma Drilling Ltd. has terminated the construction contract for a new, high-specification drillship with STX Offshore & Shipbuilding Co. Ltd.

DRILLERS

ISI downgraded Hercules Offshore to ‘Neutral’ from ‘Strong Buy’.

ISI downgraded Noble Corp to ‘Neutral’ from ‘Buy’.

ISI downgraded Pacific Drilling to ‘Buy’ from ‘Strong Buy’.

ISI downgraded Transocean Ltd to ‘Cautious’ from ‘Neutral’.
REFINERS

(Sunday) Reuters - A coking unit malfunctioned on Friday at Phillips 66'sjoint-venture 333,000 barrel per day Wood River, Illinois refinery, according to a notice posted online Saturday by Illinois pollution regulators.

MLPS

Press Release - ONEOK, Inc. announced a cash tender offer to purchase its outstanding 4.25 percent notes due 2022 and its 6.0 percent notes due 2035, up to a maximum payment amount of $150 million, excluding accrued and unpaid interest. The terms and conditions of the tender offer are described in the Jan. 13, 2014, Offer to Purchase and related Letter of Transmittal, which are being sent to current note holders.

Press Release - TransCanada Corporation announced that it will issue 10 million cumulative redeemable first preferred shares, series 9 (the "Series 9 Preferred Shares") at a price of $25.00 per share for aggregate gross proceeds of $250 million on a bought deal basis to a syndicate of underwriters in Canada co-led by Scotiabank, BMO Capital Markets and RBC Capital Markets.

Reuters - TransCanada Corp will start its 700,000-barrel-per-day Gulf Coast crude oil pipeline project in "the next 10 days", the company's CFO Don Marchand said.