Industry taxes: very low risk in the near term, moderate to low risk over the medium-term as Congress contemplates comprehensive tax reform in 2013-14. IDC's appear to be the tax issue of highest concern.

Keystone XL: surprising to us, some in Washington see potential for an approval before the election, though we are skeptical. We continue to expect a settling in point of $20/bbl between US (WTI) crude prices and global (Brent).

LNG Exports: general support on both sides of the aisle, but the incoming Democratic leader of the Senate Energy Committee, Ron Wyden, is opposed. Expect a couple more approvals then a pause to assess natgas price impact.

Ethanol: widespread acknowledgement that the blend wall is nearly upon us and something will have to give, but no strong sense of an emerging solution. Simple answer is that waivers will be given against a rising mandate. E15 liability could be addressed legislatively.

Hydrofracking: long-term there is risk given public concern about drinking water, but at the moment everyone loves (or at least respects) the unconventional revolution, and its job creation. Debate is state vs. federal disclosure rules and standards, no talk of ban or major restrictions whatsoever.

Product & crude exports: Loud but tiny minority talking about product export ban, but very little chance of getting traction. No one thinks the crude export ban will be lifted, but we don't think anyone is thinking hard about it yet, will probably need to see light crude.

Eoin Treacy's view The oil sector exemplifies the divergence between the performance of industrially oriented shares and those offering exposure to the growth of the middle class that has been evident since last summer. The former has experienced a considerably deeper correction and generally exhibits a less consistent medium-term uptrend.

The AMEX Oil & Gas Index has held a progression of higher reaction lows since late 2008 but has been subject to quite extreme volatility resulting in an inconsistent chart pattern. It has been trending lower for the last 15 weeks and has returned to test the gradual uptrend. This week represented the largest rally in months and suggests demand is beginning to return in the region of 1050. A sustained move below that level would be required to question potential for a further unwind of the short-term oversold condition.

The S&P500 Oil & Gas Storage and Transportation Index mirrors the performance of various MLPs and other pipeline companies which generally have strong records of dividend pay-outs. It has returned to test the 200-day MA and a sustained move below 190 would be required to question medium-term uptrend consistency.