RESEARCH ALERT-Energy shrs fall, Lehman sees weakness
22/02/2006 (17:03)
(Recasts lead, adds background, updates share prices)
NEW YORK, Feb 22 (Reuters) - Shares in oil and gas production and services company fell broadly on Wednesday, mirroring declines in the prices of crude oil and natural gas, as Lehman Brothers said the shares could be weak in the next few months due to volatility in the gas markets.
Lehman lowered its sector view for large-cap oil and gas producers to "neutral" from "positive," and also downgraded its ratings on Newfield Exploration Co. , Apache Corp.
and EnCana Corp..
The Amex Oil Index was down 1.2 percent at 1045.79 in mid-morning trading. Since hitting a peak for the year on Jan. 31, the index is down 8.4 percent for the month.
Meanwhile, the oil services index was down 1.7 percent and has lost more than 10 percent this month.
Crude oil has come down of late as tensions over Iran's nuclear aspirations calmed and supplies grew in the United States, while the cost of gas has fallen by more than half in the last two months on an unexpectedly warm winter season.
Lehman analyst Thomas Driscoll, in a note to clients, said that while exploration and production companies are a good long-term value, the natural gas market is "severely out of balance" in the short term and that prices through October will be stuck in a $5-$8 range.
"The current natural gas demand weakness should give long-term bulls pause," Driscoll said.
Lehman lowered its forecast 2006 benchmark price for oil to $60 from $65 and cut its 2006 forecast natural gas price to $7.75 from $9.
Crude oil futures on Wednesday were at $61.55 a barrel, while natural gas futures were trading at $7.42 per million British thermal units.
Lehman downgraded both Newfield Exploration and Apache to "equal weight" from "overweight" and cut EnCana to "underweight" from "equal weight."
Newfield Exploration shares were down 3.2 percent at $41.16, while Apache shares were down 2.5 percent at $68.97.
EnCana was down 2.6 percent at $42.52, all in morning New York Stock Exchange trade.
(Recasts lead, adds background, updates share prices)
NEW YORK, Feb 22 (Reuters) - Shares in oil and gas production and services company fell broadly on Wednesday, mirroring declines in the prices of crude oil and natural gas, as Lehman Brothers said the shares could be weak in the next few months due to volatility in the gas markets.
Lehman lowered its sector view for large-cap oil and gas producers to "neutral" from "positive," and also downgraded its ratings on Newfield Exploration Co. , Apache Corp.
and EnCana Corp..
The Amex Oil Index was down 1.2 percent at 1045.79 in mid-morning trading. Since hitting a peak for the year on Jan. 31, the index is down 8.4 percent for the month.
Meanwhile, the oil services index was down 1.7 percent and has lost more than 10 percent this month.
Crude oil has come down of late as tensions over Iran's nuclear aspirations calmed and supplies grew in the United States, while the cost of gas has fallen by more than half in the last two months on an unexpectedly warm winter season.
Lehman analyst Thomas Driscoll, in a note to clients, said that while exploration and production companies are a good long-term value, the natural gas market is "severely out of balance" in the short term and that prices through October will be stuck in a $5-$8 range.
"The current natural gas demand weakness should give long-term bulls pause," Driscoll said.
Lehman lowered its forecast 2006 benchmark price for oil to $60 from $65 and cut its 2006 forecast natural gas price to $7.75 from $9.
Crude oil futures on Wednesday were at $61.55 a barrel, while natural gas futures were trading at $7.42 per million British thermal units.
Lehman downgraded both Newfield Exploration and Apache to "equal weight" from "overweight" and cut EnCana to "underweight" from "equal weight."
Newfield Exploration shares were down 3.2 percent at $41.16, while Apache shares were down 2.5 percent at $68.97.
EnCana was down 2.6 percent at $42.52, all in morning New York Stock Exchange trade.
posted by SmartYInvestor at 8:12 AM
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