Energy stocks fall; refiners hold recent gains

SAN FRANCISCO (MarketWatch) � Energy stocks fell on Monday, leading the broader U.S. equity market lower and as refiner Phillips 66 announced an increase in dividends.

Phillips 66 PSX �shares gained 0.3%, one of a handful of companies posting small gains. On Monday the refiner�s board of directors declared a quarterly dividend of 31.25 cents per share, a 25% rise over the previous quarter.

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Tesoro Corp. TSO �was among the top gainers of the day, with shares up 1.3%. Bank of America-Merrill Lynch raised Tesoro stock to buy from neutral, saying the strong run the stock has enjoyed is set to continue.

Shares of Tesoro have gained 45% in the past three months, and 96% in the past 12 months.

PBF Energy Inc. PBF �shares declined 1.3%. PBF, which debuted on the New York Stock Exchange in December, has said it expects more crude to be delivered by rail this year.

PBF�s two East Coast refineries -- 190,000-barrel-a-day Delaware City, Del., and 180,000-barrel-a-day Paulsboro, New Jersey, refineries -- have historically paid Brent oil prices for their crude, but the rail deliveries will allow the company to pay less for its crude relative to Brent, analysts as Simmons & Co. said in a note.

�We expect increased crude-by-rail expectation to put an upward bias on earnings estimates for PBF,� they said.

Shares of refiner Valero Energy Corp. VLO �gained 0.5%.

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Crude-oil futures ended their highest since Feb. 1, with the March contract CLH3 �up $1.31, or 1.4%, to settle at $97.03 a barrel on the New York Mercantile Exchange.

Exxon Mobil Corp. XOM �shares declined 0.4%. Chevron Corp. shares CVX �were down 0.1%, and ConocoPhillips COP �retreated 0.5%.

Chevron and Apache Corp. APA �said Monday their Canadian subsidiaries have completed their previously announced transaction to build and operate the Kitimat liquefied natural gas project in British Columbia.

The companies will each own 50% of the project, which includes an LNG plant, a pipeline, and 664,000 acres of shale plays. Chevron is to become operator of the pipeline and LNG plant later on.

Apache shares were down 1%.

Oilfield services company Baker Hughes Inc. BHI �shares were down 0.5%.

Dahlman Rose & Co. on Monday downgraded to hold nine oil field service companies with strong North American exposure, including Baker Hughes.

It cited the sector�s sluggish outlook for the region�s exploration and production spending and the recent outperformance of the North American-oriented stocks.

Of the group, Baker Hughes has the most exposure to North America, Dahlman Rose added.