Drawer of a tailor: Talking about of Strategic Industries ...: eNergySTOCKS: Big oil stocks rose, as the broader market lifted parts of the energy sector even as crude prices retreated below $90 a barrel

New-found optimism over the health of the economy and the recovery from an oil pipeline blast stoked buying, but natural gas and oil services shares were little changed even after a refining margin upgrade at Bank of America.

The Amex Oil Index (XOI:1,429.64, +13.80, +1.0%) rose 1% to end at 1,430 points. Repsol SA (REP:36.87, +0.30, +0.8%) added less than 1% at $36.87, Valero (VLO:65.10, +1.37, +2.2%) jumped 2.2% to close at $65.10 and Hess Oil (HES:71.22, +1.66, +2.4%) tacked on 2.4% to $71.22. The Amex Natural Gas Index (XNG:539.56, -1.30, -0.2%) fell 0.2% to finish at 540 points. The Philadelphia Oil Services Index dipped 0.6% to 284 points.

Meanwhile, Crude fell $2.30 to end at $88.71 ahead of an OPEC meeting next week. ConocoPhillips (COP:80.04, +1.22, +1.6%) rose 1.6% to $80.04 after the company submitted a proposal for a $30 billion natural gas pipeline originating in Alaska. The pipeline project could attract participation from the other two North Slope producers BP (BP: 72.74, +0.42, +0.6%) and Exxon (XOM: 89.16, +0.57, +0.6%) . BP shares rose 0.6% to $72.74. Exxon added 0.6%, as well, to close at $89.16.

Enbridge Energy Partners (EEP:51.19, -0.34, -0.7%) moved slightly lower and Enbridge (ENB:37.27, +0.40, +1.1%) rose 1.1% to $37.27 as the company's shares worked to recover from a pipeline explosion late Wednesday. On Friday, the company said it'll take days before the pipeline affected by the blast will reopen, but its other three pipes are functioning.

Wall Street largely shrugged off the effects of the blast. "The pipeline fire poses negative headline risk to Enbridge Energy Partners, but will have minimal cash flow impact as the pipeline disruption is short," Lehman Brothers said in a note to clients.

New-found optimism over the health of the economy and the recovery from an oil pipeline blast stoked buying, but natural gas and oil services shares were little changed even after a refining margin upgrade at Bank of America.

Meanwhile, Western Refining (WNR:28.90, +1.69, +6.2%) rallied 6.2% to $28.90 after Bank of America upgraded refiner to buy from neutral. Valero also got an upgrade to buy from neutral from the bank as well. The two upgrades headlined Bank of America's overall bullishness on refining margins as voiced in a note to clients on Friday.

Looking toward 2008, Bank of America said the Street appears to be overly bearish on refining margins.

"Even with low (margin) starting points, the general 2008 sentiment for 2008 cracks has become increasingly negative, with numerous analyst downgrades citing weak demand, ethanol and the return of a few large refineries," analyst Ari Raivetz said. "We don't agree. Based on the recent Department of Energy data, we have increased confidence that the product demand weakness in September/October was seasonal and not economic, so we forecast 0.5% demand growth in '08."