Energy Stocks That Could Be Too Hot To Handle

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Tawke oil field near the town of Zacho in Dohuk province about 250 miles north of Baghdad, Iraq.

Crude oil futures prices are down about 3 percent Thursday, after settling at $102.59 per barrel Wednesday, their highest level since May 31.

An agreement announced Wednesday between Enbridge Energy Management and Enterprise Products Partners to reverse the direction of crude oil flows from Cushing, Okla., to the U.S. Gulf Coast, which could provide an initial daily capacity of 150,000 barrels by the second quarter of 2012 and 400,000 barrels by early 2013.

Crude prices are up about 33 percent since they closed at a one-year low of $75.67 on Oct. 4, 2011.

But is the rally in the energy complex sustainable? On Wednesday, JPMorgan raised its 2012 forecast on U.S. West Texas Intermediate crude oil to $110 barrel from $97.50, stating that the flow reversal will help lower the cost of moving sour crude and Bakken light sweet crude to refineries in the Gulf Coast.

Others, however, are not as optimistic. According to Steve Cortes, founder of Veracruz, a market research firm, oil prices should not be over $100. He predicts prices will trend lower because of the divergence of oil and aluminum, with energy following the downtrend in base metals.

Anthony Grisanti, president of GRZ Energy President, also believes oil will remain within the $100 range, and perhaps within six months or longer, investors may see prices come-off.

The table below highlights some of the energy companies in the S&P 1,500 index that have gained the most since oil rose from its low this year.

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