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by Stockwatch Business Reporter

West Texas Intermediate crude for August delivery added $1.14 to $59.47 on the New York Merc, while Brent for August added $1.58 to $63.59 (all figures in this para U.S.). All eyes were on Greece, which spent the day careening toward a debt default at midnight, and Iran, which received a one-week extension to July 7 to reach an agreement with Western powers on its nuclear program. An agreement could lead to a lifting of Western sanctions on Iranian oil and thus a flood of said oil into an already oversupplied market. Western Canadian Select traded at a discount of $11.75 to WTI ($47.72), down from a discount of $11.35. Natural gas for August added 2.7 cents to $2.832. The TSX energy index added 1.89 points to close at 205.65.

Cenovus Energy Inc. (CVE) added 17 cents to $19.97 on 8.33 million shares, after agreeing to sell its royalty assets to the Ontario Teachers' Pension Plan for $3.3-billion. The sale comes about a week and half after Reuters reported advanced discussions with Teachers about a deal worth $2.5-billion to $3-billion. This helped send Cenovus's stock up to $21.51 from $20.69 on June 18, but it has since dropped even further down, and barely moved up today despite the sale being larger than expected. The muted reaction may reflect a bearish report yesterday from Goldman Sachs. The report was about the Canadian oil sands, which Goldman said it likes, over all, because of their higher free cash flow, dividend growth potential and production growth potential compared with other global opportunities. Those three reasons, however, are exactly why Goldman said it does not like Cenovus. By Goldman's calculations, Cenovus generates negative free cash flow after paying out its budget and generous dividend (which, at 26.62 cents every quarter, yields 5.3 per cent), and it has the lowest production growth profile relative to its peers. Goldman acknowledged that land sales could provide a boost, but figured that this possibility was already priced into the stock. It gave Cenovus a rating of "sell" and said investors should instead buy Suncor Energy Inc. (SU: $34.40).

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