eNergy STOCKS: Exxon Mobil draws upgrade

Energy stocks gained Monday after wavering early in the session as oil prices held the $77 mark. Energy stocks waver, gain ground

An upgrade to bellwether Exxon Mobil (XOM : 85.80, +0.21, +0.2% ) also gave some fuel for the bulls after losses last week. Crude-oil futures traded close to their highest level in a year. Crude for September delivery rose 5 cents to $77.07 a barrel on the New York Mercantile Exchange.

A.G. Edwards on Monday upgraded Exxon Mobil to buy from hold.

"We believe the recent share price pullback that commenced with an over-reaction, in our opinion, to its lower-than-expected earnings, now represents an attractive entry point," A.G. Edwards said in a note to clients. Analysts set a $95 a share price target for the oil giant, based on 17 times it mid-cycle earnings estimate of $5.50 a share.

Shares of Exxon Mobil fell 5 cents to $85.54 in recent trades.

The Amex Oil Index (XOI : 1,377.48, +23.13, +1.7% ) rose 1.3%. The CBOE Oil Index (OIX :757.84, +10.26, +1.4% ) rose 1.1%. The Amex Natural Gas Index (XNG :492.00, +6.23, +1.3% ) advanced 1.4%. The Philadelphia Oil Service Index ($OSX : 272.98, +1.70, +0.6% ) fell 0.6%.

amexMeanwhile, The Wall Street Journal's "Heard on the Street" column said companies such as Occidental Petroleum (OXY :57.29, +0.39, +0.7% ) , ConocoPhillips (COP :81.23, +1.43, +1.8% ) , Exxon Mobil (XOM :85.80, +0.21, +0.2% ) , Murphy Oil (MUR :62.20, -0.21, -0.3% ) and Marathon Oil (MRO :56.85, +1.70, +3.1% ) will see likely slower growth in coming quarters. After accounting for approximately one-third of the market's earnings growth in the past two years, the companies now face rising costs and increased international taxes, as well as a shortage of exploration opportunities that are shrinking margins.

While refining margins have helped most of the majors this year, many have focused on the inability to ramp up new production and find new fields to replace reserves," according to Monday's SIG Commodity Report. Among individual shares, Hess Corp. (HES : 61.88, +1.19, +2.0% ) rose 38 cents to $61.07, after losses last week.

As for the
U.S. oil majors, Chevron Corp. (CVX : 86.25, +1.05, +1.2% ) added 1.3% to $86.31. Also on the move, Exco Resources (XCO :17.79, +0.07, +0.4% ) saw its shares rise 1.6% to $18 after it said it plans to float a $1.5 billion initial public offering in the form of a master limited partnership for various U.S.-based oil and natural-gas properties.

ConocoPhillips' (COP :81.23, +1.43, +1.8% ) rose 91 cents to $80.71 after it said the gasoline-producing unit at its Linden, N.J. refinery is being restarted.

Via: MarketWatch
by Steve Gelsi

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