Goldman also is staying “particularly bullish” on undervalued
refiners with “mid-continent” exposure …

“… given our view that the Street is reflecting too bearish of an
outlook for MidCon crude oil discounts in refining valuations. Our
updated 2013 EPS estimates are 28% above consensus and we see 38%
total return upside potential for the sector. … Our Buy-rated top
picks remain HollyFrontier (HFC) and Marathon Petroleum (MPC) among
large-caps and Northern Tier Energy (NTI) and Western Refining (WNR)
among small-mid-caps.” But they also acknowledged the eight refiners
they cover “sharply outperformed other high-beta energy sectors” in
2012.

A big driver in ratings changes for integrated exploration and
refining plays: spending in U.S. shale formations. In addition,
Goldman is looking for commodity prices to continue normalizing, with
Brent oil at between $100 and $110 per barrel, and U.S. natural gas at
around $4 per million British thermal units. Some companies are in a
position to benefit from investment in shale formations, the source
of increased domestic natural gas production, as well as extraction of
gas liquids and crude oil. Goldman says …