Cobalt, Goodrich Petroleum come in on hedge as energy sector sags; Tesla little changed

By Rebecca Melvin

New York, Oct. 27 – Several energy names came off sharply by about 0.5 point to a point on a dollar-neutral, or hedged, basis on Monday amid a mostly quiet convertibles market, a New York-based trader said.

Both Cobalt International Energy Inc. and Stone Energy Corp. came in about a 0.5 point to a point on hedge, and Goodrich Petroleum Corp. fell 4 or 5 points. But Chesapeake Energy Corp. was mostly quiet, the trader said.

Pricing slid early as equities sold off and stabilized later in the session, sources said. Nevertheless, Monday’s pullback appeared to be different from the weakness experienced in recent weeks and more like sector rotation out of energy and into other things, the trader said.

Weighing on the energy sector on Monday was a Goldman Sachs report that cut the investment bank’s outlook for U.S. oil prices to about $75 a barrel in 2015, down from a previous forecast of $90 a barrel.

A decline to $75 a barrel was predicted in the first quarter, with an even greater drop in the second quarter.

In technology, Tesla Motors Inc.’s convertibles traded lower in line with lower shares. But Yahoo! Inc.’s convertibles were better, moving in tandem with Alibaba Group Holding Ltd., which was boosted by a buy rating that Jefferies published on the China e-commerce company.

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