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Refiners to be Weakest Energy Stocks, Survey Says

(Corrects type of executives in first paragraph, administration of survey in second paragraph.)

Oil refiners will deliver the lowest returns among energy stocks in the next 12 months, according to a survey of 175 senior energy executives and institutional investors.

Over a third of those surveyed said refining stocks will fare the worst, while about 23 percent said it would be coal. The survey was given to participants in the RBC Capital Markets’ Global Energy & Power Conference in New York on June 6 and 7. Attendees included investors and employees of ConocoPhillips (COP), Transocean Ltd. (RIG) and other energy companies.

“Investors are concerned about demand destruction,” said Kurt Hallead, managing director and co-head of global energy research at RBC Capital Markets, said in a telephone interview. Rising crude prices and flat demand produce a difficult environment for refiners, and investors are clearly interested in sectors that can reap higher profits as oil trades at more than $100 a barrel, he said.

The best performers relative to the Standard & Poor’s 500 Index will be oil services companies and drillers, 41 percent of respondents predicted. Exploration and production companies were the choice of 15 percent.

Those surveyed diverged on the question of how $4 gasoline prices affect the economy. About 46 percent said they have “no impact” on gross domestic product, and 53 percent said they have a “recessionary” impact.

To contact the reporter on this story: Bradley Olson in Houston at bradleyolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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