Buckeye (BPL) (TAT) (CLR) Close Mixed as Oil Prices Pull Back

Oil prices should keep climbing toward the highs of 2008 as growing demand isn't matched by additional supplies and the price jump has been slow to cut into consumption, as Continental Resources (NYSE:CLR), TransAtlantic Petroleum (NYSE:TAT) and Buckeye Partners L.P. (NYSE:BPL) closed mixed Monday, April 25.

The front-month Brent crude-oil futures contract, the London benchmark, pulled back from a 2½-year high of $127 a barrel on April 11, amid concerns that soaring prices are hurting demand. It settled at $123.66 a barrel on Monday, up 5.4 percent so far in April. The front-month June contract on the New York Mercantile Exchange pulled back one cent to $112.28, still up 5.2 percent this month and 23 percent in 2011.

Benchmark crude for June delivery dropped a penny to settle at $112.28 a barrel on the New York Mercantile Exchange. In London, Brent crude fell 33 cents to settle at $123.66 a barrel on the ICE Futures exchange.

In other Nymex trading, heating oil was down 1.73 cents to settle at $3.1989 a gallon and gasoline futures increased a little less than a penny to settle at $3.2785 a gallon. Natural gas dropped 2.3 cents to $4.389 per 1,000 cubic feet.

Buckeye Technologies' (NYSE:BKI) Rally Earns them Downgrade

Buckeye Technologies (NYSE:BKI) had a good run over the last week, soaring about 30 percent, which brought them a downgrade from UBS (NYSE:UBS), which said they see the good news is fully priced into the share.

UBS says, "The shares have rallied 30% this week alone and
are now within 4% of our recently-revised $28 price target. At this point we do not see justification to take our target higher and believe much of the near-term good news is already priced into the shares."

UBS downgraded Buckeye Technologies (BKI) from "Buy" to "Neutral." Buckeye closed Friday at $24.86, losing 2.11, or 7.82 percent. UBS has a price target of $28 on Buckeye.

Buckeye Technologies (NYSE:BKI) Boosted on Wood Specialities Pricing Power

Buckeye Technologies (NYSE:BKI) got a little higher EPS estimate from UBS (NYSE:UBS) for full year 2011, citing stronger pricing in its wood specialties unit.

UBS says, "BKI expects 3Q EPS of $0.63-0.67. We are raising our estimate to $0.68 (from $0.56), slightly above the range. Our new FY2011 estimate is $2.25 (was $1.90). The upside is driven by stronger-than-expected 17% improvement in calendar 2011 wood specialties prices. This strength should carry into 1H2012, at least...Newsflow momentum is likely to slow, but BKI should continue to generate healthy cash flow, de-lever and potentially find attractive investments."

UBS maintains a "Buy" rating on Buckeye Technologies (BKI), which closed Thursday at $26.97, gaining $1.86, or 7.41 percent. UBS raised their price target on Buckeye from $25 to $28.

Buckeye Technologies' (NYSE:BKI) Pricing Position Remains Weak

The ability of Buckeye Technologies (NYSE:BKI) to command a premium price for their products is no longer there, although they seem to be able to increase their wood specialty price for 2011 from 6.5 percent to 13 percent.

UBS (NYSE:UBS) says, "Dissolving pulp markets were surprisingly-strong going into annual price negotiations. We recently raised our price assumption (and BKI EPS estimates) for assumed 13% wood specialty price recovery in calendar 2011. Our prior forecast was +6.5%. Putting this in perspective, 13% growth would still leave BKI’s high-end specialty prices well below spot prices for low-end textile grades. Normally BKI’s more demanding products would command a premium."

UBS reiterates a "Buy" rating on Buckeye Technologies, which closed Wednesday at $21.99, up $0.62, or 2.90 percent. UBS raised their price target on Buckeye Technologies from $22 to $25.