SECTOR COMMENTARY

Oil and gas stocks finished the day mostly higher paring loses helped in large part by continued talk of accommodative monetary policy from the Fed and on the strength in commodities. Each energy sub-sector witnessed gains, led by the higher-beta drillers group.

WTI crude oil gained $0.24 or 0.25% to close at $96.58 while Brent trades flat as rising crude oil inventories in the United States and the stronger dollar weight on oil prices. Steeper U.S. crude losses during Wednesday's trading widened the spread with Brent after Brent's premium to its U.S. counterpart on Tuesday was the smallest since July. The dollar index strengthened as the euro fell to a four-month low versus the U.S. currency on concerns about a weak Italian bond auction and worries over Cyprus' rescue deal. The EIA said that U.S. crude inventories rose 3.26 million barrels, above the forecast an increase of 700,000 barrels in a Reuters survey of analysts. Crude oil stocks at the Cushing, Oklahoma, and storage hub rose 439,000 barrels to 49.47 million, the EIA said. The premium fell as low as $12.52 during Tuesday's session, the lowest since July 2012 and in retreat after pushing to the 2013 peak of $23.45 on Feb. 8.

Henry Hub futures gained $0.077 or 1.93% to $4.068 marking the first close above the $4 level its highest level in more than 18-months on chilly weather forecasts for the next week. Cold late-season weather has triggered strong demand for heating which put a huge dent in inventories, while above-average nuclear plant outages have increased gas used for power generation and also helped tighten the market. Some traders agreed the market may be vulnerable to a sharp, technical sell-off, noting front-month futures prices have rallied nearly 30 percent since mid-February. The strong move up has been accompanied by decent volume and a 215,000-lot gain in open interest, bullish signs that indicate new buying has fueled much of the upside but could eventually trigger a sharp move lower if longs decide to liquidate. Traders and analysts expect that surplus to shrink sharply in Thursday's inventory report, with most looking for an 87 bcf withdrawal, according to a Reuters poll.

U.S. INTEGRATEDS

(Late Tuesday) Reuters - ExxonMobil reported a process compressor tripped, leading to flaring at its 344,500 barrel-per-day (bpd) Beaumont, Texas, refinery, according to a notice filed with the state pollution regulators.

INTERNATIONAL INTEGRATEDS

Press Release - General manger of CNOOC revealed that its proved, probable and possible oil and gas reserves in China increased nearly 700 million tons in 2012, producing crude oil of 51.86 million tons, natural gas of 16.4 billion cubic meters and CBM of 470 million cubic meters, with the former two figures respectively rising 11.2% and declining 300 million cubic meters.

Reuters - Italian oil major Eni has scheduled works to take place at its Sannazzaro refinery at the end of April for approximately around 40 days, a spokeswoman said on Wednesday.

Reuters - Italian oil and gas group Eni is mulling the idea of opening up its business in Iraq to China's CNPC just as it did with its giant gas discovery in Mozambique, two sources close to the matter said on Wednesday.

Reuters - Italian oil and gas giant Eni Chief Executive Paolo Scaroni said Wednesday he is confident of a return to good relations with Turkey following a dispute about offshore gas exploration in Cyprus.

Reuters - Russia's gas export monopoly Gazprom has agreed to a 13 percent cut in the price of natural gas it sells to Serbian gas monopoly Srbijagas through 2021, Gazprom Chief Executive Alexei Miller said on Wednesday.

Press Release - Petrobras has launched the auction of its Nigerian oil fields, in a sale that may fetch up to $5 billion, as Brazil's state oil company seeks to raise cash and embarks on a capital spending plan, people close to the matter told Reuters.

Reuters - Volvo Trucks will collaborate with oil major Royal Dutch Shell to use liquefied natural gas (LNG) as a transport fuel focused on North America and Europe, the two companies said on Wednesday.

(Late Tuesday) Reuters - Units of Royal Dutch Shell, Repsol and OGX Petroleo e Gas SA were given approval by Brazil to bid in an auction of oil rights in May, the country's first since 2008, Brazil's oil regulator said on Tuesday.

(Late Tuesday) Press Release - FMC Technologies, Inc. announced today that it has signed a renewed Framework Agreement with Statoil to provide subsea operations services for its developments on the Norwegian Continental Shelf. The duration of the agreement is five years with options for three additional three-year extensions.

Reuters - Gas production from Total E&P UK's St. Fergus terminal will be reduced by 5 million cubic metres for 24 hours from 0600 GMT this morning, the company said on Wednesday.

CANADIAN INTEGRATEDS

Reuters - Imperial Oil Ltd. said a small fire at its 121,000 barrel per day refinery at Sarnia, Ontario, was quickly extinguished with no impact on operations.

U.S. E&PS

Topeka Capital initiated coverage on nine E&P companies and a cautious stance on the sector overall given current valuations at our long-term commodity price deck following the recent run-up in the sector. We believe companies with improving capital efficiencies and catalysts will outperform and garner the most attention by investors in 2013, which has been the theme so far this year among the resource plays, resulting in the positive alpha. Topeka Capital initiated Cabot Oil & Gas Corp., Cimarex Energy Co., Oasis Petroleum, Inc., and SM Energy Co. with a ‘Hold’ rating and Pioneer Natural Resources and Rosetta Resources with a ‘Buy’ rating.

SunTrust Robinson initiated coverage of Laredo Petroleum Holdings, Inc. with a ‘Neutral’ rating.

SunTrust Robinson initiated coverage of Pioneer Natural Resources Co. with a ‘Buy’ rating.

OIL SERVICES

(Late Tuesday) Press Release - FMC Technologies, Inc. announced today that it has signed a renewed Framework Agreement with Statoil to provide subsea operations services for its developments on the Norwegian Continental Shelf. The duration of the agreement is five years with options for three additional three-year extensions.

Press Release - Halliburton announced that Jose C. Grubisich has been named to the company's board of directors. He will serve on the Audit and the Health, Safety and Environment committees. The appointment was effective March 20, and Grubisich will stand for election at the annual meeting in May with all of the other directors.

REFINERS

Reuters - Marathon Petroleum Corp. reported maintenance at gasoline making fluid catalytic cracking unit 1 (FCCU) electrostatic precipitator at its 451,000 barrels per day (bpd) Galveston Bay Refinery in Texas City, Texas, according to a filing with state pollution regulators.

MLPS

Press Release - Access Midstream Partners, L.P. announced that it has priced an underwritten public offering of 9,000,000 common units representing limited partner interests. The Partnership has granted the underwriters a 30-day option to purchase up to 1,350,000 additional common units. The common units were offered to the public at $39.86 per unit. The offering is expected to close on April 2, 2013, subject to customary closing conditions.

(Late Tuesday) Press Release - Access Midstream Partners, L.P. announced the commencement of an underwritten public offering of 9,000,000 common units representing limited partner interests of the Partnership. The Partnership will also grant the underwriters a 30-day option to purchase up to 1,350,000 additional common units.