Energy stocks led the broader markets to near multi-year highs as the dollar fell and oil rose ahead of the expected announcement of more monetary action from the Fed on Thursday. The sector experienced broad-based gains, and was led by the refiners and oilfield service providers, followed closely by E&Ps. E&Ps were led by the mid-cap gas-levered names corresponding to a rally in the underlying commodity. Amid the risk-on positioning, MLPs faltered.
WTI gained $0.63 or 0.65% to $97.17 as expectations that the U.S. Federal Reserve this week will provide additional monetary stimulus to bolster the economy put pressure on the dollar. Meanwhile, Brent oil futures rose on expectations that a German court will approve a euro zone rescue plan.
Natural gas futures rallied $0.180 or 6.40% to $2.992, gaining ground for the first time in four sessions, on expectations that Thursday’s EIA inventory report will show a very bullish number following proactive shut-ins and other Isaac-related disruptions. Traders are expecting a build of 28 Bcf, which would be 59 Bcf lower than the same week last year and help to shrink the storage glut.
U.S. INTEGRATEDS
(Late Monday) Reuters - Chevron Corp's reported a release of lube oil due to a broken pipe at its 245,000 barrel-per-day (bpd) refinery in Richmond, California, according to a filing with state regulators.
INTERNATIONAL INTEGRATEDS
Reuters - Gazprom, faced with a formal European Commission anti-trust probe, said the EU was pressuring it to cut its prices and vowed to maintain its price link to oil prices.
Reuters - Russia's top gas producer Gazprom said on Tuesday it increased 2012 investment program by 198 billion roubles ($6.27 billion) to 975 billion roubles.
Reuters - Petrobras' fuel-price policy has generated a profit rather than a loss for Brazil's state-led oil company in the 2002-2012 period, Chief Executive Maria das Gracas Foster told members of a Brazilian Senate committee on Tuesday. The CEO also commented that it needs to "work on its debt" in order to maintain the Brazilian oil company's investment-grade bond rating.
Reuters - Royal Dutch Shell halted oil drilling in the Chukchi Sea in the Arctic on Monday just one day after starting as sea ice encroached on its drill ship, the company said in a statement.
Reuters - Norwegian natural gas flows have been reduced after decreased field availability at Statoil cut volumes by 12.5 million cubic meters per day, the company on Tuesday.
US E&Ps
Bernstein Research initiated coverage on Cabot Oil & Gas, Range Resources, and Southwestern Energy with a ‘Outperform’ rating believe that they will benefit from rising gas prices into 2013 and their Marcellus footprints.
Global Hunter Securities cuts Plains Exploration & Production to ‘Accumulate’ from ‘Buy’ given the inherent risk and uncertainty with the pending acquisition.
BMO Capital Markets initiated coverage of QEP Resources with an ‘Outperform’ citing the current trading levels present investors an attractive risk/reward profile by which to gain exposure to higher-margin growth from oil production on the upstream side.
CANADIAN E&Ps
(Late Monday) SocGen raised Talisman Energy to ‘Hold’ from ‘Sell’.
DRILLERS
(Late Monday) Press Release - Seadrill Limited announced the pricing of the offering of $1.0 billion in aggregate principal amount of 5.625% unsecured notes due 2017 in a private offering within the United States to qualified institutional buyers.
(Late Monday) Press Release - Transocean Ltd. announced that its wholly-owned subsidiary, Transocean Inc., priced a public offering of $750 million of 2.500% Senior Notes due 2017, issued at a price of 99.714% of the principal amount, and $750 million of 3.800% Senior Notes due 2022, issued at a price of 99.309% of the principal amount.
MLPs
Press Release - Cheniere Energy Partners, L.P. announced today that its subsidiary, Sabine Pass Liquefaction, LLC has entered into a partial assignment agreement and related agreements with Total Gas & Power North America, Inc. whereby Sabine Liquefaction would progressively gain access to Total's send-out capacity and other services provided under its terminal use agreement with Sabine Pass LNG, L.P.
(Late Monday) ONEOK Partners, L.P. announced that it has priced an offering to sell $1.3 billion of senior notes, consisting of $400 million of five-year senior notes at a coupon of 2.0 percent and $900 million of 10-year senior notes at a coupon of 3.375 percent. The notes will be issued under the partnership's existing shelf registration statement previously filed with the Securities and Exchange Commission.
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