Sector Update: Energy

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Energy stocks were ending mostly higher Wednesday with the NYSE Energy Sector Index advancing about 1.1% while shares of energy companies in the S&P 500 were up about 0.2% as a group. Crude oil for September delivery settled $1.59 higher at $96.07 per barrel while September natural gas fell 5 cents to $3.82 per 1 million BTU.

In company news, ConocoPhillips ( COP ) was holding on to small gains late in Wednesday's session after analysts at BMO Capital Markets raised their price target for shares of the oil major by $10 to $80 apiece.

The research shop also boosted its EPS estimates for the company through 2016 and reiterated a Market Perform rating for the stock, citing improving upstream margins.

"We have modelled COP's cash generation by region in order to test its ability to grow its upstream margins at its target of 3-5% CAGR to 2017," the analysts, Iain Reid and Nikolas Stefanou, wrote in a new research note today. "Although our analysis gives a lower outcome of 2% to 3% growth, there is upside if COP can grow its Lower 48 unconventional volumes faster than we model, which is possible given its successful development program, as resources have already been substantially increased."

COP shares were ahead about 0.6% at $80.41 each shortly before the closing bell, earlier rising to a session high of $80.55 a share. The stock has traded within a 52-week range of $62.74 to $87.09 a share, rising more than 26% over the past 12 months.

In other sector news,

(+) MILL, Reports 24% increase in the value of proved reserves to $448 mln at the end of July compared with prior three months. Also discloses plans to sell its 10.5% Series D fixed rate/floating rate cumulative redeemable preferred stock (MILL-PD).

(-) SD, Chief Operating Officer David Lawler resigns, effective Sept. 3. The firm has begun a search for a permanent COO while Craig Johnson, now senior vice president in charge of operations in Oklahoma, is promoted to executive vice president of operations.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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