Oil prices were on the move today, as fears spread over a slowdown in Europe, as Germany's purchasing managers' index signaled contraction, and the situation in Cyprus remained unresolved. At 4:00 pm EDT on Thursday, Brent crude was down 1.32%, to $107.29, and WTI crude was down 1.19%, to $92.39. U.S. natural gas was down 0.88%, to $3.93, after this morning's report from the EIA that natural gas in underground storage fell by 62 billion cubic feet to 1,876 Bcf.
Today's top three oil and gas stocks
Today's oil and gas stocks leader was Tesoro Logistics (NYSE: TLLP ) , up 3.35%, to $55.23, near its 52-week high of $56.63. While the market was down today, multiple MLPs were up with the Alerian MLP ETF (NYSEMKT: AMLP ) , up 0.75%. Tesoro Logistics was added to the Alerian MLP Index just this past Friday. Investors should note, MLPs provide investors with tax advantages if used wisely, but they are not available for investors investing in MLPs through ETFs. Tesoro Logistics was spun off from Tesoro (NYSE: TSO ) last April. The company owns crude oil gathering systems in the Bakken Shale, as well as terminals and storage facilities throughout the west coast. While up today on no news, Tesoro Logistics is appealing to investors for its stable distributions, which currently sport a trailing yield of 3.4%. In addition to growth acquisitions, Tesoro Logistics is in a great position for growth from asset dropdowns from its parent company.
Second among oil and gas stocks today was InterOil (NYSE: IOC ) , up 3.22%, to $73.80. Interoil is the developer of the massive Elk and Antelope natural gas fields in Papua New Guinea and has an LNG export facility to go along with it. The company has been searching for partners to build its facilities and set a firm deadline of Feb. 28 for proposals. The company received multiple bids to partner with the company, and InterOil is currently evaluating them. The situation appears to be a little dicey, however, because after InterOil's conference call on February 28, the country's petroleum and energy minister took out full-page ads in the local paper contesting the CEO's statements that the export facility had been approved. He stressed that the facility would only be approved if the government found InterOil's partner to be acceptable. While there is certainly upside for InterOil if everything goes well, there are numerous risks, and investors would be wise to pass on the situation.
Third among oil and gas stocks today was PVR Partners, L.P. (NYSE: PVR ) , up 3.01%, to $23.59. This MLP currently has a whopping 9.1% trailing yield, which it gets through its investments in coal royalties and natural gas midstream assets. PVR has been challenged recently by declining coal prices, as utility companies have been switching to natural gas. Last month, the company reported earnings below expectations; actually, the company reported a loss of $0.30 per unit versus analyst expectations of earnings of $.17 per unit. The MLP has taken steps, though, to diversify its asset base, particularly with its May 2012 acquisition of Chief Gathering, which runs midstream assets in the Marcellus shale. Should coal prices turn around, PVR Partners will be in a sweet spot to profit.
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