In this issue:

 With many of our picks showing big autumn gains even as oil prices retreat, this is an opportune time to take some profits. Our game plan suggests trimming the positions in the biggest and most speculative winners and redeploying the proceeds into the recovering refiners, as well as the portfolio Best Buys that have yet to hit our targets.

Among those are leading oil services provider Schlumberger (NYSE: SLB), which continues to generate excellent growth from its large and extremely well-diversified global footprint, as well as Bakken driller Whiting Petroleum (NYSE: WLL) after its latest upside earnings surprise.

Production in the Permian Basin is booming, but logistical constraints abound. We discuss the current logistical picture and the companies striving to bring new supplies of crude oil from West Texas to customers everywhere.

Finally, a new government report permits the easy tracking of the production and profitability trends in all the leading US shale basins. We report on our first impressions from this excellent new analytical tool. 

Portfolio Action Summary

• Selling Westport Innovations (Nasdaq: WPRT) from the Aggressive Portfolio

• Adding Valero Energy (NYSE: VLO) to the Growth Portfolio; buy below $45

• Upgrading HollyFrontier (NYSE: HFC) in the Growth Portfolio; buy below $53

• Upgrading Tesoro (NYSE: TSO) in the Growth Portfolio; buy below $56

• Upgrading Marathon Petroleum (NYSE: MPC) in the Aggressive Portfolio; buy below $77

• Raising the target for Whiting Petroleum (NYSE: WLL) in the Growth Potfolio; buy below $70

Commodity Update

As predicted, West Texas Intermediate (WTI) dropped below $100/bbl, with a Tuesday closing price of $97.78/bbl (down $5.68 from two weeks ago). Don’t be surprised to see it test $90 by the end of the year. Brent crude fell $0.28 to $109.69/bbl, increasing the Brent-WTI differential to $11.91. The front-month contract for natural gas closed Tuesday at $3.59/MMBtu, down 13 cents over the past two weeks.

Although many brokerages have downgraded the refiners in the past two to three months, many of them have begun to show strength as the Brent-WTI differential has recovered. Expect a very weak showing for the 3rd quarter, but dips should be viewed as a buying opportunity for select refiners with the Brent-WTI differential above $10/bbl.

In Other News

• Refiners surged and the price of ethanol tax credits plummeted as news leaked that the EPA is considering a reduction in mandated ethanol blending volumes for 2014   

• First Solar (Nasdaq: FSLR), up 48 percent since being added to the Growth Portfolio less than 2 months ago, jumped another 9 percent as J.P. Morgan analysts picked the company as one of their top picks in the clean-tech sector

• Canadian National Railway (NYSE: CNI) beat earnings estimates for Q3 on the back of higher petroleum and chemicals revenue and a record $2.7B in overall revenue

• The US is “over-fracked and over-drilled”, according to Matthias Bichsel, Projects and Technology Director at Royal Dutch Shell (NYSE: RDS.A)

• The Energy Information Administration (EIA) has confirmed what the BP Statistical Review already noted, that US carbon dioxide emissions fell by nearly 4 percent in 2012