Shocker: Greece Hammers Oil

Published on Friday, 10 February 2012 21:20 Written by Todd Shriber

New York, February 10^th (TradersHuddle.com) – Obviously, that headline is a tad sarcastic, but humor aside, it was a dreadful day in the oil pits as talks for a Greek bailout package once again ran into stumbling blocks. That familiar refrain sent NYMEX-traded West Texas Intermediate down $1.17 to $98.67 per barrel while Brent crude for March delivery dropped $1.28 to settle at $117.31 a barrel. That snapped winning streaks of three and eight days, respectively, for the benchmark contracts. A faltering euro, plunging commodities prices and big equity market losses sent the PowerShares DB US Dollar Index Bullish (NYSE: UUP) higher by 0.6% on strong volume.

The United States Oil Fund (NYSE: USO) was down 0.8% while the United States Brent Oil Fund (NYSE: BNO) gave up 1%. Both declines occurred on below average turnover.

Since today was the worst day of the year for U.S. stocks and given that the Dow Jones Industrial Average was in the red by a triple-digit margin for most of the day, it was no surprise to see the big oil stocks taking it on the chin. Dow components Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) both shed more than 1% with the only silver lining coming in the form of the fact that both declines came on weak volume.

ConocoPhillips (NYSE: COP), the third-largest U.S. oil company, was a pleasant surprise on the day. The shares were up 1% on quadruple the average daily volume after Deutsche Bank upgraded the stock to "buy" from "hold" and raised its price target to $90 from $82. That implies significant upside from Conoco’s close of $72.25.

Even more impressive gains could be found with Cobalt Energy (NYSE: CIE). That stock soared almost 33% on volume that was roughly 16 times the daily average after the company announced positive test results for its Cameia-1 well off the coast of Angola, Africa’s second-largest oil producing-nation behind Nigeria. Citigroup reiterated a "buy" rating and $26 price target on Cobalt while a more bullish assessment came from Howard Weil. That research firm upgraded Cobalt to "market outperform" from "market perform" and lifted its price target to $41 from $23. That implies good upside from Cobalt’s Friday close just below $32.

Anadarko Petroleum (NYSE: APC) lost just half a percent, but finished the week higher by over 3% and can still be found flirting with new highs.

Total (NYSE: TOT), Europe’s third-largest oil company and the last of that group to report quarterly results, fell 1.6% following its fourth-quarter update today. The French oil giant said its fourth-quarter profit climbed nearly 13% aided by higher oil prices, but 2011 production fell 1.3% to 2.35 million barrels a day.