SOURCE: Paragon Financial Limited

Paragon Financial Limited

August 20, 2012 08:20 ET

Oil Prices Continues Rally on Stimulus Speculation -- EIA Raises 2012 Oil Forecasts

The Paragon Report Provides Stock Research on EXCO Resources and Lone Pine Resources

NEW YORK, NY--(Marketwire - Aug 20, 2012) - Oil and gas stocks have stagnated in 2012 as the recent economic slowdown in Europe and China has created a less than favorable demand outlook for crude. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) year-to-date has gained just over 2 percent. The Paragon Report examines investing opportunities in the Oil & Gas Industry and provides equity research on EXCO Resources Inc. (NYSE: XCO) and Lone Pine Resources Inc. (NYSE: LPR).

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Despite weak global demand oil prices have gained nearly a third during the last six weeks. At the beginning of the week Brent crude prices hit $115 per barrel, the highest it's been in the last three months. Since the end of June Brent crude prices have rebounded roughly 30 percent. The EIA earlier this month raised its forecasts for 2012 oil prices. West Texas Intermediate crude is now projected to average $93.90, up from the previous estimate of $92.83, while Brent crude was increased to $108.07 a barrel from $106.

"The market is decoupling from fundamentals," said Carsten Fritsch, an analyst at Germany's Commerzbank in Frankfurt. "Much of the strength is based on factors -- such as more U.S. economic stimulus -- that are far from guaranteed."

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Exco Resources is a natural gas and oil company engaged in the exploration, exploitation, development and production of onshore natural gas and oil properties. Their operations are focused in certain key natural gas and oil producing regions of the United States. Oil, natural gas and natural gas liquids (NGLs) production was 50 Bcfe, or 550 Mmcfe per day, for the second quarter 2012 compared with 537 Mmcfe per day in the first quarter 2012 and 504 Mmcfe per day in the second quarter 2011.

Lone Pine Resources Inc. is engaged in the exploration and development of natural gas and light oil in Canada. Lone Pine's reserves, producing properties and exploration prospects are located in Canada in the provinces of Alberta, British Columbia and Quebec and the Northwest Territories. The company reported that during the second quarter Oil and NGLs net sales volumes of 4,440 barrels per day organically increased 13% from the first quarter of 2012.

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