Energy stocks helped to lead the broader markets higher, along with materials and utilities, lifted by risk-taking on stimulus hopes in China and after Greek election polls pointed to support for pro-bailout parties. Trading volume was light and stocks closed off the highs of the day.

Within the oil and gas complex, the strongest gains were booked by the mid and small cap oil and natural gas producers followed by the oil service providers. Refiners were the lone detractors as the crack spreads narrowed.

WTI crude oil fell $0.10 or 0.11% to $90.76 as the dollar rose to its highest level versus the euro since July 2010 amid renewed jitters over Spain after ratings agency Egan Jones downgraded the country’s debt. A bearish set of expectations for the inventory data to be released later this week also weighed on sentiment.

Natural gas futures fell $0.139 or 5.41% to $2.429 ahead of the front-month contract's expiration later in the day, ending with the biggest one-day slide in nearly three months and the largest three-day drop in nearly four months. After a hot U.S. Memorial Day holiday weekend in consuming regions of the nation, some milder weather was on tap for later in the week, curbing air conditioning loads. "As we now enter the summer cooling season the short-term weather forecasts will start to have an almost daily impact on the direction of natural gas prices," noted Energy Management Institute's Dominick Chirichella.

International Integrateds

Reuters - BP Plc's 225,000-barrel-per-day Cherry Point, Washington, refinery was operating normally on Tuesday after a completing a plantwide restart, sources familiar with refinery operations said.

Reuters - Maxim Barsky, who resigned last year as deputy chief executive of Anglo-Russian oil firm TNK-BP after failing to win BP Plc's support to become CEO, will return as an adviser, two sources close to TNK-BP said.

Reuters - BP Plc will return to Libya to resume oil and gas exploration work, which it halted last year due to the uprising against Muammar Gaddafi's rule, Libya's state oil company NOC said.

(Sunday) Reuters - Goldman Sachs is considering selling off Swedish oil group Svenska Petroleum Exploration in chunks, the Independent on Sunday reported. The UK newspaper said on Sunday that most potential bidders, including the UK's BP Plc and Royal Dutch Shell, were not interested in the whole group, which is owned by Saudi billionaire Mohammed Hussein al-Amoud.

Reuters - Italy's oil and gas major Eni said it has won a new oil and gas exploration block in a rich hydrocarbon region of Indonesia in the first international bid round in the country in 2012 as it aims to expand in exploration and production there.

Reuters - Russia's No.2 oil producer Lukoil plans a secondary listing in Hong Kong within a year, a company executive said on Tuesday, as it seeks to attract Asian investors.

(Monday) Reuters - Russia's No.2 oil producer LUKOIL reported a 7.7 percent increase in its first-quarter net profit to $3.79 billion, beating t h e analysts' average forecast of $3.07 billion, thanks to higher hydrocarbon prices.

(Monday) Reuters - Brazil's state-led oil company Petrobras expects to complete the bulk of a $13.6 billion asset-sale plan by the end of the year, helping finance $225 billion of investments under its five-year corporate spending program, the worlds largest.

Reuters - Spanish oil firm Repsol is considering pulling out of Cuba after its first well in an oil exploration project off the island came up dry, its chairman said.

Reuters - Spanish oil firm Repsol plans to invest heavily in exploration and recent discoveries, while cutting its dividend payout and selling non-core assets, as it battles to recover from the seizure of Argentine unit YPF.

(Monday) Reuters - Spanish oil major Repsol said it was remodeling its management structure but stopped short of creating the post of chief executive.

Reuters - Mozambique has approved Bangkok-based PTT Exploration and Production's $1.9 billion bid for UK-listed Cove Energy, the companies said, removing the risk Maputo could block the bid in favor of a lower one from rival Royal Dutch Shell plc.

Reuters - Royal Dutch Shell will suspend drilling and abandon exploration on two Libya blocks due to disappointing results, the company said in a statement.

(Monday) Reuters - Royal Dutch Shell Plc has put an Alberta oil sands project on the block, six years after acquiring it as part of a C$2.4 billion ($2.3 billion) acquisition near the height of the last Canadian energy boom.

Reuters - Gas leaked on the Heimdal platform in the North Sea off Norway on May 26 and caused an emergency evacuation, but the situation was normalized the same day, operator Statoil said.

Reuters - The massive Kashagan field in Kazakhstan must start producing before the end of the year, Total's Chief Executive Officer Christophe de Margerie said.

Canadian Integrateds

Press Release - Cenovus Energy Inc. is pleased to announce a $3 million donation to the new Trades and Technology Complex at SAIT Polytechnic that will help to address the shortage of skilled labor in the oil and natural gas industry.

Reuters - Husky Energy Inc's 155,000 barrel per day (bpd) Lima, Ohio, refinery was operating normally on Tuesday as a strike by 230 hourly workers entered a fifth day, a company spokesman said.

Reuters - Suncor reported an "SVU" unit malfunction at its 93,000-barrel-per-day Commerce City, Colorado, refinery on Monday in a filing with regulators.

U.S. E&PS

Sterne Agee upgraded Approach Resources to ‘Neutral’ from ‘Underperform’ based on valuation.

Reuters - The head of New York's state pension fund urged shareholders of Chesapeake Energy Corp to withhold votes to re-elect two members of the natural gas producer's board of directors.

(Monday) Reuters - State-run Oil India is looking to buy stakes in U.S. gas driller Chesapeake Energy Corp.'s Mississippi Lime basin and ConocoPhillips' oil sand assets in Canada, its head of finance said.

(Late Friday) Press Release - Chesapeake Energy Corporation issued the following statement regarding the Schedule 13D filed late today by affiliates of Carl Icahn with the Securities and Exchange Commission disclosing ownership of approximately 7.56% of Chesapeake’s common stock.

(Late Friday) Reuters - Activist investor Carl Icahn reported a 7.6 percent stake in oil and gas company Chesapeake Energy Corp, and asked for at least four members of its board to be replaced.

Citigroup upgraded ConocoPhillips to ‘Buy’ from ‘Neutral’ believe the split up is causing significant turnover in the shareholder base providing an opportunistic entry point into both names.

Reuters - Forest Oil Corp said a lawsuit was brought against it and Lone Pine Resources Inc, which it earlier owned, that alleged Lone Pine made false statements and hid certain facts in its initial public offering prospectus.

Canadian E&PS

(Monday) Canaccord Genuity dropped coverage on several Canadian E&P’s including Canacol Energy Ltd, Gran Tierra Energy, Pacific Rubiales Energy Corp, and Petrominerales Ltd.

(Monday) Pacific Rubiales Energy Corp. is pleased to announce that it has agreed to purchase 85,714,285 units of CGX Energy Inc. at a price of C$0.35 per unit for an aggregate investment of C$30 million. At the same time, the Company has entered into a technical services agreement with CGX whereby Pacific Rubiales will provide technical assistance to CGX in respect of its operations.

(Monday) CIBC upgraded Parex Resources Inc to ‘Sector Outperformer’ from ‘Sector Performer’ in anticipation of positive exploration well results.

Refiners

(Late Friday) Reuters - Phillips 66 reported an equipment malfunction at its 146,000 barrel-per-day (bpd) joint-venture Borger, Texas refinery, according to a filing with state pollution regulators.

(Late Friday) Reuters - Tesoro Corp said its 68,000-barrel-per-day (bpd) refinery in Kenai, Alaska, was undergoing maintenance on unspecified units.

Reuters - Standard & Poor's Ratings Services said today that it assigned its 'BBB' issue rating to $300 million in aggregate principal of State of Louisiana Gulf Opportunity Zone Revenue Bonds issued by the Parish of St. Charles on behalf of Valero Refining - New Orleans LLC (Valero Refining; unrated), a subsidiary of Valero Energy Corp.

Reuters - Valero Energy Corp.'s 142,000 barrel-per-day (bpd) Corpus Christi, Texas, refinery reported flaring on Tuesday in the East Plant due to a malfunction, according to a notice filed with the Corpus Christi Local Emergency Planning Committee.

Reuters - A gasoline-making fluid catalytic cracker (FCC) at Valero Energy Corp's 180,000-barrel-per-day Memphis, Tennessee, was increasing to planned rates after it shut on Friday to repair a small leak.

(Late Friday) Reuters - Valero Energy Corp said there was no material impact to production from an incinerator trip at the sulfur recovery unit (SRU) in the 292,000-barrels-per-day refinery in Port Arthur, Texas.

MLPS

Press Release - Oiltanking Partners, L.P. announced that D. Mark Leland has been appointed to serve on the board of directors of its general partner. Mr. Leland will serve as an independent director and as a member of both the Audit and Conflicts Committees of the board.

Market Commentary

Stocks rose as signs Greece would stay in the euro zone were enough to spark buying in what has been a weak month for equities, while Facebook plumbed new lows on high volume.

TOP NEWS

U.S. home prices edged higher for the second month in a row in March as the housing recovery picked up traction, while gains in some of the hardest hit areas suggested the improvement was becoming broader based.

Thomson Reuters Energy Contacts:

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Rich Pontillo:

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Tamar Essner:

646-822-3646

Jeff O’Malley:

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Roopak Chakravarty

312-288-3090

Jasna Sulejmanagic

646-822-2829