Commodity Corner: Oil Follows Stocks' Lead

- Commodity Corner: Oil Follows Stocks' Lead

Wednesday, September 07, 2011
Rigzone Staff
by Matthew V. Veazey

Thanks to a German court ruling supporting bailouts in the euro-zone, world equities markets posted healthy gains Wednesday. The WTI and Brent crude oil benchmarks followed suit.

Light sweet crude oil for October delivery gained nearly four percent to end the day at $89.34 a barrel. Brent, meanwhile, climbed 2.7 percent to settle at $115.80 a barrel. Buoying stock markets on both sides of the Atlantic as well as Asia was the German Constitutional Court's rejection of an attempt to block German involvement in bailouts of other euro-zone countries.

The Dow Jones Industrial Averaged gained nearly 2.5 percent while the S&P 500 and Nasdaq rose by 2.86 percent and 3.04 percent, respectively. In Europe, the London-based FTSE 100 finished more than 3.1 percent higher and the CAC 40 in Paris gained 3.63 percent. Major exchanges in Shanghai, Tokyo, and Hong Kong posted more modest increases.

The WTI traded within a range from $86.15 to $89.74 while the Brent contract price fluctuated from $112.81 to $115.98.

Natural gas for October delivery managed to break the $4.00 mark, peaking at $4.04 per thousand cubic feet. The midweek momentum faded by the close of floor trading, however, with the front-month contract settling at $3.94 for the second straight day.

October natural gas bottomed out at $3.90 Wednesday.

The price of a gallon of gasoline gained nearly nine cents to settle at just under $2.91, also the intraday high. The price floor during Wednesday's trading was $2.82.

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Commodity Corner: Oil Rises on Bullish Gasoline Stocks

- Commodity Corner: Oil Rises on Bullish Gasoline Stocks

Wednesday, August 17, 2011
Rigzone Staff
by Saaniya Bangee

Light, sweet futures held gains of almost 2 percent Wednesday after the EIA reported a sharp decline in U.S. gasoline inventories.

September crude gained nearly a dollar to settle at $87.58 per barrel on the New York Mercantile Exchange. Its European counterpart settled at $110.60 a barrel, up $1.47.

The U.S. Energy Information Administration (EIA) reported a higher than expected drop in gasoline stockpiles, pushing oil prices higher early on in Wednesday's trading session. The EIA said gasoline stockpiles declined by 3.5 million barrels last week to 210.1 million barrels. An increase in gasoline demand suggests refineries require more oil. Meanwhile, the market pared gains when the EIA reported an increase of 4.23 million barrels in oil inventories.

Benchmark West Texas Intermediate traded between $86.65 and $89.00 Wednesday. Brent benchmark peaked at $111.74—the highest since Aug. 4.

In other NYMEX trading, front-month natural gas futures settled at $3.93 per thousand cubic feet after fluctuating between $3.89 and $3.98 Wednesday. Gasoline for September delivery gained 1.65 cents ending the session at $2.89 a gallon. Reformulated gasoline traded as high as $2.93 and as low as $2.86 Wednesday.

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Fitch Confirms NRG Rating

- Fitch Confirms NRG Rating



Aug 9, 2011

Fitch Ratings on Tuesday confirmed its noninvestment-grade "B+" overall credit rating for wholesale power company NRG Energy Inc.(NYSE:NRG).

The credit rating agency also gave its "BB+" rating to NRG's new first line facilities and affirmed its "BB" rating on the company's unsecured notes. The outlook is stable.

Fitch pointed to the diversity of NRG's power plants in terms of size, fuel location, along with its improved business risk profile, strong liquidity position and historically conservative hedging strategy, as grounds for the ratings.

Fitch said it expects NRG's credit metrics to bottom out in 2013 and for its solid liquidity profile to allow it to navigate a continued drop in commodity prices.

NRG Energy has a potential upside of 28.7% based on a current price of $21.24 and an average consensus analyst price target of $27.33.

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White House announces oil savings standards for heavy duty trucks, buses

- White House announces oil savings standards for heavy duty trucks, buses



Aug 9, 2011

The Obama administration announced new fuel efficiency and greenhouse gas pollution standards for work trucks, buses, and other heavy duty vehicles that it said will save American businesses who operate and own these commercial vehicles approximately $50B in fuel costs over the life of the program. Under the guidelines, trucks and buses built in 2014 through 2018 will reduce oil consumption by a projected 530M barrels and greenhouse gas pollution by approximately 270M metric tons.

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ReneSola Reported Q2 Results; Issued Guidance

- ReneSola Reported Q2 Results; Issued Guidance



Aug 9, 2011

ReneSola (NYSE:SOL) reported Q2 EPS of $0.02, missing consensus estimates of $0.16 per share. Revenues fell 1.8% year-over-year to $249.3 million, vs. consensus estimates of $147.6 million.

Mr. Xianshou Li, ReneSola's chief executive officer said, "Both wafer and module prices fell faster than expected in the second quarter as European subsidy cuts weakened demand and led to oversupply in the industry. Although this affected both our top and bottom lines, we were able to maintain a gross margin of 18.4% with our industry-low wafer processing costs and growing in-house polysilicon production. Our new Virtus wafer, a multicrystalline wafer that can achieve cell efficiency rates of up to 18.2%, has an even higher profit margin than our existing wafers and has been well-received by clients with its high efficiency-to-price ratio. We expect Virtus wafers to replace all of ReneSola's existing multicrystalline wafers by the end of 2011. As the solar market matures, we will continue to focus on wafer production to capitalize on our brand name, scale of operations and innovative technologies to lead the industry in cost-competitive solar manufacturing."

The company expects Q3 revenues of $220 to $240 million, vs. consensus estimates of $166.63 million.

Renesola has a potential upside of 132.4% based on a current price of $2.77 and an average consensus analyst price target of $6.43.

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El Paso Pipeline Partners Missed Q2 Estimates, Top Line Up 9%

- El Paso Pipeline Partners Missed Q2 Estimates, Top Line Up 9%



Aug 4, 2011

El Paso Pipeline Partners (NYSE:EPB) reported Q2 EPS of $0.50, missing consensus estimates of $0.54 per share. Revenues for the quarter rose 9.1% year-over-year to $358.0 million, missing consensus estimates of $360.8 million.

Jim Yardley, president and chief executive officer of El Paso Pipeline Partners said, "We continue to deliver superior results for our unitholders with another quarter of higher earnings and cash flow. Our portfolio of high-quality assets continues to grow through acquisitions and expansions. During the quarter, we completed the acquisition of additional interests in CIG and SNG, and now own 100 percent of SNG. We also placed into service additional expansion projects which brings our total to fourteen in less than three years. Our successful acquisitions and expansions have enabled us to deliver consistent distribution growth, as we have increased quarterly distributions every quarter since our IPO in 2007."

El Paso Pipeline Partners has a potential upside of 19.4% based on a current price of $35.29 and an average consensus analyst price target of $42.15.

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El Paso Topped Q2 EPS Estimates By $0.10 Per Share

- El Paso Topped Q2 EPS Estimates By $0.10 Per Share



Aug 4, 2011

El Paso (NYSE:EP) reported Q2 EPS of $0.34, ahead of consensus estimates of $0.24 per share.

Doug Foshee, chairman, president, and chief executive officer of El Paso Corporation said, "We are very pleased with our financial and operational performance. With the completion of our Ruby Pipeline, we have placed three major projects into service this year and will complete two more by year end. And with natural gas likely to be the cornerstone for growth in electric power development, we continue to see exciting growth opportunities on the horizon. Execution in our E&P business is outstanding, with oil programs ramping up with results that are equal to or better than expectations. We are very encouraged by the completion of our first 7,000 foot plus lateral in the Wolfcamp Shale, and we see this program delivering many years of very profitable development across our large acreage position. On the financial front, we continue to make excellent progress, improving our balance sheet primarily through drop downs to El Paso Pipeline Partners. This progress has put us in position to separate into two outstanding companies by year end. We believe this is a great time to be a shareholder of El Paso."

El Paso has a potential upside of 27.7% based on a current price of $19.49 and an average consensus analyst price target of $24.89.

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GM Topped Estimates For Q2, Rose 18.7% YoY

- GM Topped Estimates For Q2, Rose 18.7% YoY



Aug 4, 2011

General Motors (NYSE:GM) reported adjusted Q2 EPS of $1.54, better than analyst estimates of a $1.20 per share. Revenues for the quarter rose 18.7% year-over-year to $39.40 billion, topping consensus estimates of $36.71 billion.

GM Chairman and CEO Dan Akerson said in a statement, "GM's investments in fuel economy, design and quality are paying off around the world."

General Motors (NYSE:GM) has a potential upside of 59.9% based on a current price of $27.17 and an average consensus analyst price target of $43.45.

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Toyota July Auto Sales Slip 20%

- Toyota July Auto Sales Slip 20%



Aug 2, 2011

Toyota Motor Sales USA Inc.(NYSE:TM) announced Tuesday that its July U.S. sales fell 22.7% as it continued to deal with parts shortages stemming from the March earthquake and tsunami in Japan.

Toyota sold 130,802 vehicles in July, compared to the 169,224 in the same month last year.

The Japanese automaker sold 27,016 of its Camry car, 22.9% down from 35,058 in July 2010.

Corolla sales dropped 35.7% to 17,577, while sales of the Prius hybrid, which is made only in Japan, tumbled 43.9% to 7,907.

Sales of the Sienna minivan rose 2.3 percent to 10,620.

Toyota Motor has a potential upside of 12.7% based on a current price of $81.96 and an average consensus analyst price target of $92.4.

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GM July Sales Rise 8%

- GM July Sales Rise 8%



Aug 2, 2011

General Motors Company (NYSE:GM) says its U.S. sales climbed almost 8% last month, led by fuel-efficient vehicles such as the Chevrolet Cruze car.

But GM's increase may not be the standard. Analysts foretell that sales of new cars and light trucks in the U.S. rose slightly from a year earlier as few deals and economic worries kept car shoppers home.

Vice President of Sales Don Johnson reports that unemployment, low consumer confidence and uncertainty over the federal debt ceiling scared some buyers off.

GM sold 214,915 vehicles in July, including almost 25,000 Cruzes. That could potentially make it America's top-selling car for the second straight month.

Sales of the Chevrolet Equinox and GMC Terrain small crossovers rose nearly 80%.

General Motors has a potential upside of 56.8% based on a current price of $27.71 and an average consensus analyst price target of $43.45.

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Trina Solar Shares Slip

- Trina Solar Shares Slip



Aug 2, 2011

Shares of Trina Solar Ltd.(NYSE:TSL) fell over 6% Tuesday in premarket trading after the company lowered its expectation for shipments of solar modules and profit margins in the second quarter.

Trina, a Chinese solar module maker, reported that it expects to report module shipments in the range of 395 to 397 megawatts for the three month period ended June 30. The company formerly said it would ship between 430 and 450 megawatts. Overall profit margins also were lowered to between 17 and 17.5%, compared with earlier forecasts of margin percentages in the "low 20s."

Company officials said shipments and profit margins suffered as demand for solar modules slowed down, in part because Italy cut solar subsidies.

Chairman and CEO Jifan Gao said, "We expect a significant improvement in production costs and an increase in shipment volumes in the third quarter."

Trina retained its prediction for 2011 shipments between 1.75 and 1.8 gigawatts. That's a rise of 65.6 to 70.3% from last year. The company will report its second-quarter results on Aug. 23.

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U.S. Consumer Spending Stalled In June

- U.S. Consumer Spending Stalled In June



Aug 2, 2011

U.S. consumer spending stalled in June as a drop in hiring caused households to cut back, according to the Commerce Department in a report on Tuesday.

In June purchases June rose 0.1% after not much change, while personal incomes likely increased 0.2% in June, the smallest gain in seven months.

Because of the lack of jobs in combination with wage gains have failed to keep pace with inflation, it raises the risk of further cut backs on consumer spending that accounts for 70% of the world's largest economy.

The Gross domestic product increased to a 1.3% annually rate from April in the course of June after a 0.4% gain in the previous quarter that was less than what was earlier expected. Household spending increased 0.1%, the weakest performance since the Q2 of 2009, the end of the last recession.

Federal Reserve Chairman Ben S. Bernanke said in semi-annual testimony to Congress on July 13, "Wages are very stagnant and that's affecting consumer spending and consumer confidence. There is also ongoing uncertainty about the durability of the recovery."

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Commodity Corner: Oil Falls on EIA Stocks Report

- Commodity Corner: Oil Falls on EIA Stocks Report

Wednesday, July 27, 2011
Rigzone Staff
by Matthew V. Veazey

U.S. commercial crude oil inventories as reported by the Energy Information Administration reversed course last week, catching analysts off-guard and contributing to lower oil prices Wednesday.

Light sweet crude oil for September delivery lost 36 cents to settle at $97.40 a gallon after the EIA reported that oil stocks rose 0.65 percent last week to 354 million barrels. The 2.3 million-barrel week-on-week build contrasted with analysts' expectations; interestingly, analysts surveyed by Platts had predicted a draw of 2.3 million barrels for the period.

Prior to Wednesday's report, EIA had reported seven straight weeks of falling inventories. From May 27 to July 15, oil stocks reportedly declined by 5.9 percent. The Brent benchmark lost 85 cents to end the day at $117.43 a barrel.

The WTI traded within a range from $97.28 to $99.50 while the Brent fluctuated from $117.26 to $118.34.

The newly formed Tropical Storm Don is expected to affect operations somewhat at some Western Gulf of Mexico oil and gas installations as it tracks toward the Texas coastline. However, the National Hurricane Center on Wednesday afternoon was not expecting it to intensify into a hurricane. Front-month natural gas ended the day unchanged at $4.37 per thousand cubic feet.

August natural gas futures peaked at $4.41 and bottomed out at $4.34 during the midweek session.

Gasoline lost a penny to settle at $3.14 a gallon Wednesday. The intraday range for the August contract fluctuated from $3.135 to $3.18.

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Tesoro Fined For Refinery Violations

- Tesoro Fined For Refinery Violations



Jul 26, 2011

Oil giant Tesoro Corp.(NYSE:TSO) has arranged to pay $500,000 in fines for dozens of air pollution violations at its refinery in Martinez.

The Bay Area Air Quality Management District reported the settlement to the San Antonio-based company on Monday. District officials say emissions from the Golden Eagle refinery often surpassed air-quality standards for carbon monoxide, soot and other pollutants between 2006 and 2009.

The refinery was also fined for failing to fix leaky equipment and failing to correctly sample and monitor pollution during that period. In total, Tesoro collected 46 different citations.

Company spokesman Mike Marcy tells the Contra Costa Times while the violations were regrettable, they were reported by the company for the most part. He also claimed that 40% of them were for paperwork errors.

Tesoro has a potential upside of 12.5% based on a current price of $25.48 and an average consensus analyst price target of $28.67.

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Anadarko Petroleum Topped Q2 EPS Estimates

- Anadarko Petroleum Topped Q2 EPS Estimates



Jul 25, 2011

Anadarko Petroleum (NYSE:APC) announced Q2 EPS of $1.14, ex-items, ahead of consensus estimates of $0.95 per share. During the quarter, sales volumes totaled 62 million barrels of oil equivalent, or 685,000 BOE per day, averaging about 2.3 billion cubic feet of natural gas per day, 225,000 barrels of oil per day, and 72,000 barrels of natural gas liquids per day.

Anadarko Chairman and CEO Jim Hackett said, "We achieved record liquids sales volumes during the quarter, enhancing margins and generating excellent cash flows. Nearly all of the year-over-year volume growth was attributable to a 34,000 barrel-per-day increase in liquids volumes. These results contributed to strong discretionary cash flows of more than $1.8 billion -- approximately $117 million above our capital expenditures, which included a one-time cash investment of $518 million associated with the acquisition of the Wattenberg plant."

Anadarko Petroleum has a potential upside of 15.4% based on a current price of $82.58 and an average consensus analyst price target of $95.26.

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Exxon Mobil's Marine Affiliate Announces Plan For Two New Tankers

- Exxon Mobil's Marine Affiliate Announces Plan For Two New Tankers



Jul 25, 2011

Exxon Mobil (NYSE:XOM) U.S. marine affiliate, SeaRiver Maritime, signed a letter of intetn with Aker Philadelphia Shipyard for the construction of two U.S. flag, crude, oil tankers in partnership with Samsung Heavy Industries.

The vessels will be used to transport Alaska North Sloe crude oil from Prince William Sound, Alaska to U.S. West Coast destinations. Project planning work is underway with construction of the 115,000 deadweight ton tankers expected to begin by mid-2012.

The vessels are scheduled for delivery in 2014 and will be capable of carrying 730,000 barrels of crude oil to help meet U.S. energy needs. They will replace two double hull tankers.

Will Jenkins, president of SeaRiver said, "Today's announcement is consistent with our long-term ongoing commitment to safe and reliable marine transportation in the United States and throughout the world. These new vessels will provide jobs for American shipyard workers and help support energy needs along the U.S. West Coast for decades to come."

Exxon Mobil (NYSE:XOM) has a potential upside of 9.3% based on a current price of $85.08 and an average consensus analyst price target of $92.96.

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Commodity Corner: Oil Settles Higher on Bullish Stocks Data

- Commodity Corner: Oil Settles Higher on Bullish Stocks Data

Wednesday, July 20, 2011
Rigzone Staff
by Matthew V. Veazey

The price of light sweet crude oil gained 64 cents Wednesday to settle at $98.14 a barrel on news of a larger-than-expected drop in U.S. oil stocks. The Brent benchmark gained $1.09 to end the day at $118.15 a barrel.

The U.S. Energy Information Administration reported Wednesday that the country's commercial crude oil inventories fell nearly 1.1 percent last week to 351.7 million barrels. The 3.8 million-barrel draw was well above analysts' expectations. For instance, a Platts survey of analysts projected a draw of only 1.3 million barrels.

WTI futures fluctuated from $96.80 to $99.02 during Wednesday's session. The Brent contract peaked at $118.56 and bottomed out at $117.06.

Americans from the Upper Midwest to the South to the East Coast are seeking air-conditioned relief from high heat and humidity. Triple-digit heat indices are common throughout the eastern half of the country, and such conditions are expected to continue into next week. In spite of the sweltering heat, natural gas futures edged downward Wednesday to $4.50 per thousand cubic feet.

Front-month natural gas traded within a range from $4.43 to $4.60.

Gasoline futures ended the day higher at $3.15 a gallon—the intraday high. The intraday low for gasoline was $3.10.

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Harley-Davidson Beats EPS Estimates, Sees Growth in 2011

- Harley-Davidson Beats EPS Estimates, Sees Growth in 2011



Jul 19, 2011

Harley Davidson (NYSE:HOG) reported quarter results of $0.81 per share above consensus estimates of $0.71. Revenue for the quarter rose 18% year-over-year to $1.34 billion ahead of consensus estimates of $1.26 billion.

The Company raised shipment guidance for 2011 and now expects to ship 228,000 to 235,000 Harley-Davidson motorcycles to dealers and distributors worldwide, compared to guidance provided April 19, 2011 of 215,000 to 228,000 motorcycles. In the third quarter of 2011, the Company expects to ship 60,000 to 65,000 motorcycles. For all of 2010, the Company shipped 210,494 motorcycles.

Harley-Davidson is currently above its 50-day moving average (MA) of $38.24 and above its 200-day of $36.91.

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Department of Energy Grants DTE Energy $5.4M

- Department of Energy Grants DTE Energy $5.4M



Jul 14, 2011

DTE Energy (NYSE:DTE) received a $5.4 million federal grant through the Clean Energy Coalition to fund the conversion of more than 170 gasoline-powered fleet vehicles to use compacted natural gas.

The grant that was awarded to Clean Energy Coalition's Green Fleets program by the U.S. Department of Energy under the American Recovery and Reinvestment Act also pays for the building of two new CNG fueling stations and the refurbishment of 11 others across the state of Michigan.

DTE Energy has a potential upside of 1.3% based on a current price of $50.08 and an average consensus analyst price target of $50.71.

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ConocoPhillips to Split Into Two Next Year

- ConocoPhillips to Split Into Two Next Year



Jul 14, 2011

ConocoPhillips (NYSE:COP) announced Thursday that it will be splitting into two companies. The division should take place sometime in the first half of 2012.

James J. Mulva, the ConocoPhillips chairman and chief executive, said in a statement, "We have concluded that two independent companies focused on their respective industries will be better positioned to pursue their individually focused business strategies."

ConocoPhillips has a potential upside of 13.4% based on a current price of $74.4 and an average consensus analyst price target of $84.38.

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