FRIDAY, JULY 13, 2012

SECTOR COMMENTARY

Energy stocks rallied strongly along with the broader market as investors snapped up equities after six straight days of losses for the Dow and the S&P 500. Better-than-expected data from China and an optimistic report from J.P. Morgan despite its large trading loss lifted investor sentiment. Higher-beta subgroups such as the drillers and refiners led the way to the upside, while the integrateds showed relative underperformance as investors put cash to work in riskier stocks.

WTI crude oil futures rose for a third day in a row, and gained more than 3% for the week, as China's second quarter GDP turned out not as bad as some predicted, easing global growth worries. NYMEX crude for August delivery settled at $87.10 a barrel, gaining $1.02, or 1.18%. For the week, front-month crude gained $2.65, or 3.14%, after dipping 0.6% in the week to July 6.

Front-month natural gas futures were unchanged at $2.874. The National Weather Service's six to 10-day outlook issued on Thursday again called for above-normal readings for about the northern two-thirds of the nation, with below-normal readings only on the West Coast and normal readings across the South.

U.S. INTEGRATEDS

Reuters - ExxonMobil reported a planned flaring at its 149,500 barrel-per-day refinery in Torrance, Calif., according to a filing with state regulators on Thursday.

INTERNATIONAL INTEGRATEDS

Reuters – Petrobras, Brazil's state-controlled company plans to raise diesel prices by 6 percent at refineries, according to a securities filing on Thursday.

Reuters – Brazil's state-led oil company Petrobras is in talks with oil workers to avert a potential strike being considered by their unions from July 20, Chief Executive Maria das Gracas Foster said on Friday.

Reuters - The five month takeover battle between oil major Royal Dutch Shell and Thai firm PTT Exploration & Production for explorer Cove Energy could be thrashed out in an auction process, under a ruling by Britain's Takeover Panel.

Reuters - Statoil's Snoehvit LNG plant in the Barents Sea is still shut and it is unclear if the production stop will delay shipments, the firm said on Friday.

U.S. E&PS

Robert W. Baird & Co. raised Range Resources and Cabot Oil & Gas to ‘Outperform’ from ‘Neutral.’

Macquarie upgraded Whiting Petroleum to ‘Outperform’ from ‘Neutral.’

CANADIAN E&PS

Raymond James cut Gran Tierra Energy to ‘Outperform’ from ‘Strong Buy.’

OIL SERVICES

Press Release - Basic Energy Services, Inc. today reported selected operating data for the month of June 2012. Basic's well servicing rig count remained unchanged at 431. Well servicing rig hours for the month were 76,100 producing a rig utilization rate of 76%, compared to 72% and 74% in May 2012 and June 2011, respectively.

DRILLERS

(Late Thursday) Press Release - Noble Corporation today announced that the Company has entered into a three-year term drilling contract with Anadarko Petroleum Corporation for the Noble Bob Douglas, one of Noble's new ultra-deepwater drillships currently under construction at the Hyundai Heavy Industries Co. Ltd. (HHI) shipyard in Ulsan, South Korea. The drillship, which is being constructed on a fixed price basis, is expected to be utilized for operations primarily in the U.S. Gulf of Mexico.

REFINERS

(Late Wednesday) Reuters - Phillips 66's 139,000 barrels per day Los Angeles-area refinery in Wilmington, California, will undergo planned flaring from 14-16 July, it said in a filing with California pollution regulators.

MLPS

Citigroup raised Kinder Morgan to ‘Buy’ from ‘Neutral.’

MARKET COMMENTARY

Stocks shed the sour tone that plagued equities all week, with a sharp rally that broke a six-day losing streak.

TOP NEWS

JPMorgan Chase and Wells Fargo reported strong growth in their mortgage lending businesses and lower loan losses, offering signs of improvement in the U.S. economy.

U.S. consumer sentiment cooled again in early July to its lowest level in seven months as Americans took a dim view of their finances and job prospects, a survey release showed.