Energy/Shipping
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News and Views
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Macro/Technicals
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Active Names
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Sector News, M&A, Capital Raises
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Cantor Research
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News and Views
Oil fell for a second straight session on Monday as peak gasoline use in top consumer the United States waned with the end of the summer driving season, while tepid growth in the services sector signalled crude demand will be slow to pick up. The U.S. non-manufacturing sector grew in August for an eighth straight month, but at a slower pace than July and at a rate that was below expectations.
U.S. natural gas futures ended sharply higher on Friday, as concerns about increasing storm activity prompted shorts to cover ahead of a long holiday weekend despite a milder U.S. weather forecasts for next week that should slow demand.
Macro/Technicals
XLE: 54.2; 1.21%UTY: 422.43; +.6%
OIH: 103.8; +.9%
TAN: 7.84; +1.42%
AMJ: 32.75; +.52%
BIDY: 700; -.28%
BDIY: 2881; +.17%
Leaders: DSTI +35.04%, CPE +12.43%, GST +8.7%, OMEX +5.0%, WNR + 4.95%
Laggards: NEGI -28.28%, ASTI -5.37%, RAME -3.93%, GLP -2.42%, GOK -2.11%
Active Names
Oil & Gas: CXO, END, ETE, FTK, FTO, GMXR, ME, NOA, SLB, TSO
Alt Energy: ESLR, TSL
Utilities: ATE, OKE
Sector News, M&A, Capital Raises
DVN China National Offshore Oil Corp signs amendment agreements to production-sharing contracts on three deepwater blocks
SOLR GT Solar files for 10M share offering on behalf of sellers through UBS, Credit Suisse and BofA Merrill
EPD Follow-up: Enterprise Products and Enterprise GP Holdings (EPE) to merge ($38.45)
EPE will merge with a wholly-owned subsidiary of EPD. Under the terms of the definitive agreement, EPE unitholders would receive 1.5 EPD common units in exchange for each EPE limited partner unit they own at closing, representing a premium of approximately 16% based on the closing prices of each equity security on 3-Sep. The merger would also result in a substantial increase in cash distributions for EPE unitholders. Based on the cash distributions paid in August 2010 by EPE and EPD, this would result in a 54% increase in cash distributions for the unitholders of EPE
DRYS DryShips files mixed shelf of indeterminate amount
BP Industry bankers say Apache (APA), Occidental (OXY) may buy part of BP's stake in Prudhoe Bay - FT (401.7p)
An attempt to line up a deal for Apache to buy half of BP's 26% stake in Prudhoe Bay fell through earlier this year. The FT says it does not know if BP might be willing to sell its entire stake, and that BP is looking to sell up to $30B of assets
Shippers call for container-lines' cartel to be subjected to anti-trust law - South China Morning Post
At an annual meeting, the Asian Shippers' Council says the Transpacific Stabilization Agreement is particularly offensive, with standard rates' having quadrupled. The carriers counter that they failed to meet operating costs on some routes last year. The chairman of the council says that Asian shippers want Asian governments to break up the agreement, as the US and Europe similarly have over the past couple of years.
CMS Barron's discusses CMS Energy ($17.79)
Barron's notes that while most analysts rate CMS a Buy, it trades at a discount to its peers and 18% of its float has been sold short. The company has recently raised its dividend, and Barrons says that if regulation remains accomodating, and the company's investments yield results, investors could see a higher stock price and an attractive yield.
NE Barron's is positive on Noble ($32.70)
Barron's notes that the stock has been hit by fallout from the Deepwater Horizon disaster and the Gulf Coast drilling moratorium, but as the economy recovers, demand for oil will surely rise and at current valuations, Noble could be a buying opportunity. Companies mentioned include Transocean (RIG) and Diamond Offshore Drilling (DO), as well as Noble customer Petrobras (PBR).
Research Away
Goldman Sachs
SLB ($57.37) Schlumberger rated buy at Goldman Sachs The 6-month target is $68. The stock was previously not rated.
KeyBanc
NI ($17.91) NiSource downgraded to hold from buy at KeyBanc
FBR Capital
PXD ($62.50) Pioneer Natural upgraded to outperform from market perform at FBR Capital Target is $85.
Bank of America Merrill Lynch
Bank of America Merrill Lynch upgrades RRI; downgrades HEP, others
Upgrade:
RRI RRI Energy upgraded to buy from neutral; target is $5
Downgrade:
HEP Holly Energy Partners downgraded to neutral from buy; target is $52
Initiated:
MIR Mirant reinstated buy with $12 target
CHKM Chesapeake Midstream Partners initiated neutral with $25 target
Morgan Stanley
NS ($59.13) NuStar Energy LP downgraded to equal-weight from overweight at Morgan Stanley Target cut to $61 from $64.
Susquehanna
OXY ($78.32) Occidental Petroleum initiated positive at Susquehanna Target is $98.
Cantor Research
Marine Transportation: The Ship's Log - Weekly Global Shipping Industry Update
- Dry Bulk: The Capesize market surged last week as Chinese iron ore restocking and ton-mile expansion from the iron ore export ban in the Indian state of Karnataka continued to positively affect rates, we suggest.
- Oil Tankers: Sluggish demand for westbound crude combined with a severe oversupply of tonnage continued to weigh on the VLCC sector last week.