JPMorgan (NYSE:JPM) Launches Coverage on Cenovus (NYSE:CVE), Nexen (NYSE:NXY), Talisman (NYSE:TLM), Canadian Natural Resources (NYSE:CNQ) and Suncor (

JPMorgan took aim at companies with strong exposure to the Canadian oil sands in Alberta, with analyst Katherine Minyard initiating coverage on Cenovus Energy (NYSE:CVE), Nexen (NYSE:NXY), Talisman Energy NYSE:TLM), Canadian Natural Resources (NYSE:CNQ), Suncor Energy (NYSE:SU) and Husky Energy (TSE:HSE).

She started off Cenovus Energy, Nexen, and Talisman Energy with "Overweight" ratings. Canadian Natural Resources and Suncor Energy with "Neutral" ratings, and Husky Energy with an "Underweight" rating.

“We believe depth of resource base, production growth visibility and exposure to an increasingly important source of global oil supply make for an attractive value proposition in oil sands-rich Canadian oils,” Minyard said in a note to clients.

Minyard concedes her outlook on the sector is based on the ongoing support underlying oil prices. If they were to drop, the scenario for the above-mentioned companies in the short term could change significantly.

She concluded, “Although our near- and long-term oil price modeling assumptions do not call for prices to differ significantly from the current $81/barrel, significant or sustained weakness in the oil price would likely pressure share prices.”

Citigroup (NYSE:C) On Gulf Lawsuits, Lobbying

While we hear a lot about BP (NYSE:BP) and Transocean (NYSE:RIG) in the Gulf oil crisis, there are a lot of oil companies who could have exposure to the fallout from the oil spill, which could result in some significant pressure in the months ahead, according to a Citigroup (NYSE:C) analyst.

The analyst said, In the Independent Oil & Gas industry, Anadarko (NYSE:APC), Apache (NYSE:APA), Newfield (NYSE:NFX), Nexen (NYSE: NXY) and Noble Energy (NYSE:NBL) have offshore Gulf of Mexico exposure. Of the US integrated oil industry, Chevron (NYSE:CVX) and Marathon (NYSE:MRO) have the highest level of activity taking place in the deep waters of the GOM. ExxonMobil (NYSE:XOM) and Hess (NYSE:HES) have limited exposure. Occidental Petroleum (NYSE:OXY) has zero exposure and is likely to benefit from the current environment."

Ultimately what some consider an over-response from the Obama administration, this could be devastating to the overall U.S. economy at a time when it continues to struggle to recover from the great recession.