Core Viewpoint - Allete's shares have entered oversold territory with a Relative Strength Index (RSI) reading of 29.7, indicating potential buying opportunities as heavy selling may be exhausting [1][2][3] Group 1: Stock Performance - Allete shares traded as low as $63.555, with a current trading price of $63.65, reflecting a decrease of approximately 0.3% on the day [1][3] - The 52-week range for Allete shares is between $61.51 (low) and $66.40 (high) [3] Group 2: Technical Indicators - The average RSI for the energy stocks universe is 51.1, while WTI Crude Oil has an RSI of 47.5, and Henry Hub Natural Gas is at 41.4 [2] - The 3-2-1 Crack Spread RSI is currently at 45.6, indicating a relatively stronger position compared to Allete's RSI [2]

Investment Rating - The report maintains a selective and defensive bias, preferring gas over oil in the North American Energy sector [5][7]. Core Insights - WTI oil prices have increased approximately 20% in June due to geopolitical risks and a tight crude market, but prices are expected to trend lower in the second half of 2025 unless there are significant supply disruptions [4][28]. - The report emphasizes a preference for US natural gas over oil, with EQT identified as a top pick in the Exploration & Production (E&P) sector [7][9]. - Refining margins have improved significantly, with a 30% quarter-over-quarter increase, leading to 2Q EBITDA estimates that are about 10% above consensus [7][10]. Summary by Sector US Majors - The US Majors provide exposure to higher oil prices while maintaining resilience if prices decline, supported by strong balance sheets and integrated operations [9]. - Estimated free cash flow (FCF) yields for XOM and CVX are projected at 7% and 8% respectively at a WTI price of $65 [9]. US Exploration & Production (E&P) - The report retains a defensive stance, favoring US gas over oil, with a median FCF yield forecast of 9% for gas at $4.40 Henry Hub [9]. - Positive rate of change is a focus for oil producers, with OW-rated DVN and PR highlighted [9]. Canadian Producers - Large-cap Canadian oil sands operators are expected to perform in line with US peers, with a forecasted median shareholder return yield of 9% at $65 WTI [9]. Energy Services & Equipment (ESE) - Preference is given to international and offshore upstream exposure, gas over oil, and non-upstream exposure, with BKR and SLB identified as key stocks [9]. Refining & Marketing - Refining margins are expected to benefit from summer demand, with key stock picks including VLO and DINO [10]. Midstream Energy Infrastructure - Midstream remains misvalued, with a recommendation to wait for a better entry point before deploying new capital [13]. High Yield Energy (Credit) - The sector is currently underperforming, with a recommendation to focus on gas-levered and balanced commodity exposure over oil-levered credits [13].