So far this year, daily consumption of motor fuel has ranged between 8.32 million barrels a day and 8.53 million barrels a day, indicating that demand for ethanol should be about 800,000 to 820,000 barrels a day, well within the available plant capacity. Actual U.S. production in February of this year totaled 809,000 barrels a day, according to the latest figures available from the EIA. The EIA estimates that ethanol production will average about 860,000 barrels a day in 2013, with production rising from 840,000 barrels a day in the first half of the year to around 900,000 barrels a day in the second half.

Ethanol is expected to consume nearly 5 billion bushels of corn this year, out of a total crop now projected to come in at around 12.3 billion bushels. As before, about 40% of the U.S. corn crop now goes into ethanol production. The production projection fell because of late planting in some areas due to cool, wet weather.

The two largest publicly traded ethanol producers in the country, Archer Daniels Midland Co. (NYSE: ADM) and Valero Energy Corp. (NYSE: VLO), either experienced reduced operating profit (ADM) or a net loss (Valero) on ethanol production in 2012. High corn prices, due mainly to last year’s drought, combined with higher ethanol inventories contributed the lower or negative margins.

The inventory problems appear to be behind the producers now, and corn prices, though higher than last year at the same time, remain relatively low at around $6.35 a bushel.

In a nutshell, U.S. ethanol capacity should be able adequately to supply demand from U.S. drivers, who continue to drive less than they did a year ago. Ethanol prices should remain reasonable as well, barring more bad news about crop yields or renewable energy credits.

The economic benefits of fracking cannot be argued. Analysts can look at the jobs and GDP benefits in North Dakota — the current fracking capital of the world. And also forecasts of what the process and the resulting access to oil reserves will do to make the U.S. energy independent within a decade — something that seemed impossible two or three years ago. Estimates are that fracking could help add several hundred thousand jobs in America, and this at a time when the government continues to struggle to solve the unemployment disaster.

In new comments from the Department of the Interior, its management said its goal for hydraulic fracturing was to create a “commonsense measure which will support safe and responsible production of America’s domestic energy resources.” Comments from the public are welcome. However:

Once comments on the updated draft have been collected and analyzed, the BLM expects to issue a final rule that will ensure that operators apply proven cost-effective safety and environmental protection processes when engaging in hydraulic fracturing on public and Indian lands.

So, please let Interior know what you think, but do not expect it to matter.

In fact, for the most part, Interior would like to wash its hands of the matter. That would leave local authorities to handle regulation, which they likely will do based on their own economic interests:

While the revised draft seeks to establish baseline environmental safeguards across all public and Indian lands, it also complements efforts of several states that are regulating hydraulic fracturing, including Colorado, Wyoming, North Dakota, and Texas. The proposal includes a variance process that allows for deferring to states and tribes that already have standards in place that meet or exceed those proposed by this rule.

Do not expect states that will rely on fracking for most of their economic success to set many “safeguards” at all.

The organization reported:

Today’s national average price for a gallon of regular unleaded gasoline is $3.65. This price is seven cents more expensive than one week ago and 14 cents more than one month ago. The seven-cent weekly increase is the largest such spike since February and today’s national average price at the pump is the highest since March.

Much of the increase is due to oil prices, AAA management says. Since oil has continued to tick up toward $100 a barrel, there may not be relief through the balance of the summer.

AAA and other organizations put out estimates of how many people will travel on summer holidays, primarily on Memorial Day, the Independence Day and Labor Day. So far, there have been no dire predictions of sharp drops. If other consumer behavior is any measure, there will not be much change. So far, higher tax rates and persistent unemployment have not overwhelmed consumer spending. Road trips are relatively cheap, particularly in world in which purchases of expensive new cars and new or old homes have picked up. A surge in consumer spending has relegated gasoline prices to a back burner. That was not the case a few years ago, especially in 2008, when the recession was vicious and gas prices moved toward $4.

If Memorial Day is a reasonable litmus test, so far the consumer economy continues to hold its own, and may even have gained speed. A few cents a gallon more does not matter.

The firm chose companies in the following segments: Aerospace & Defense; Auto, Auto Parts and Auto Retailers; Coal & Precious Metals; Engineering & Construction; Construction Materials & Diversified Industrials; Oil & Gas; Services; and Shipping & Transportation Equipment. We included a street-consensus target from Thomson Reuters and put in firm data specific to these calls today.

The Boeing Company (NYSE: BA) was the top pick for Aerospace & Defense “given our updated commercial aircraft forecast coupled with our view that Boeing’s gross order book will be >1.0x in 2013/2014. Longer-term, given the cash flow dynamics with ramping production and improving 787 cost curve, a 50% move in Boeing shares is achievable before the peak of the cycle in 2015.” Boeing’s $120 price target at Stern Agee compares to a current price of $98.92 and compares to a consensus price target of $103.90. BE Aerospace (NASDAQ: BEAV) was also shown as a top pick after Boeing with big upside. BE Aero trades at $62.95 and Stern Agee’s $72 target compares to $69.17 from Wall Street.

Ford Motor Co. (NYSE: F), General Motors Company (NYSE: GM) and TRW Automotive Holdings Corp. (NYSE: TRW) led in the Auto, Auto Parts and Auto Retailers. The firm said, “We believe all three companies are well positioned to benefit from the global demand trends, as well as the likelihood of company specific actions to enhance shareholder value.” Ford is the only one of these three with a dividend.

Consol Energy Inc. (NYSE: CNX) was Stern Agee’s Coal & Precious Metals top pick as the low-cost provider with a solid balance sheet. The firm said, “We note the solid potential of upside to Northern Appalachian thermal margins as scrubbed utilities and international power companies seek out high heat coals, with enhanced met coal margins once pricing recovers and added shale exploitation success. We believe the market will accelerate its appreciation of the asset value compiled at Consol, especially with an overcapitalized balance sheet.” Shares closed at $33.97 recently, way under the $60 target price from Stern Agee. That implies almost a double your money call, but we would caution that Wall Street’s consensus price target was $42.22 per share on last look.

Fluor Corp. (NYSE: FLR) was the top pick in Engineering & Construction and Stern Agee said, “We expect continued strong cash generation, balance sheet strength and margin expansion as the current cycle evolves. With the approval of the second U.S. LNG export facility last week, we believe these opportunities continue to become more tangible providing further catalysts for Fluor.” Stern Agee see Fluor going to $80 and Wall Street has a consensus of $75 on the stock versus $64.57 recently.

Martin Marietta Materials Inc. (NYSE: MLM) is the top pick for Construction Materials & Diversified Industrials as the number-two producer of construction aggregates with a strong balance sheet and significant operating leverage of over 60% to a volume recovery. The firm said, “For investors in housing-related stocks looking for what’s next, we think MLM is it.” At $110.91 now, the consensus target is actually under the current price at $110.67. Stern Agee has the street-high target of $128 for this stock.

Whiting Petroleum Corp. (NYSE: WLL) was the top exploration and production pick in Oil & Gas. Stern Agee said, “Given increasing activity in the Permian Basin and Niobrara this year, we see upside to 2013E production of 94.8 mboe/d. With a possible monetization of the mature Postle field and/or a joint venture in an emerging basin as 2013 catalysts, we believe shares remain attractively valued relative to our $62 price target.” Whiting’s current price is $46.54 against a consensus price target of $60.50 on the stock.

Superior Energy Services, Inc. (NYSE: SPN) was said to remain as a top pick in the Services sector which should post strong earnings and cash flow growth in 2014-15. Stern Agee likes its improving U.S. land market and rising Gulf of Mexico activity coming with strong international growth initiatives. The price of $28.44 compares to a Stern Agee target of $34.00 and a consensus target price of $32.93.

The Greenbrier Companies, Inc. (NYSE: GBX) is Stern Agee’s top pick in Shipping & Transportation Equipment. The firm said. “We believe GBX is poised to benefit from continued strong order flow for tank cars, a re-acceleration in non-tank car backlog growth, and robust margin expansion over the next two years as more higher margin tank and automotive cars are delivered out of the backlog.” Shares trade at $24.45 and hit a new 52-week high of $24.45 today, and Stern Agee sees the stock going up to $28 versus a $26 consensus price target.

Eagle Materials Inc. (NYSE: EXP) was also given a positive reiterated Buy rating. Stern Agee said that the construction recovery remains on track, as does the company’s frac sand business. Both are expected to be strong drivers over the next few years. At about $77 now, Stern Agee has a target price of $85.00 and the consensus price target is $83.50.

As you can see, some of these picks are very aggressive while others are very much in-line with Wall Street consensus target price expectations.

The underlying trends in the first quarter were very favorable, as North American margins improved sequentially, despite a decline in the rig count, suggesting significant operating leverage as activity levels recover. Going forward, U.S. drilling permits have risen strongly (onshore and in the Gulf of Mexico) and the Deutsche Bank team believes the next catalyst for the group is an increase in the rig count.

With all of these positives, Deutsche Bank has four top stocks to buy, and some other favorite names.

Baker Hughes Inc. (NYSE: BHI) has seen a large bump in revenue from the increased Gulf of Mexico drilling. The Deutsche Bank price target on the stock is $59. The Thomson/First Call estimate for the stock is much lower at $49.50. Investors receive a 1.30% dividend.

Halliburton Co. (NYSE: HAL) is another large cap stock to buy. Although the company is indemnified from the operator in its contract from the Deepwater Horizon/Macondo disaster in 2010, negative press and the possibility of an adverse settlement has kept a lid on the stock. The Deutsche Bank price target is 56. The consensus target for the stock is lower at 50. Shareholders receive a 1.10% dividend.

Nabors Industries Ltd. (NYSE: NBR) is a pure drilling play, and free cash flow, which had been negative in recent years, is expected to reach $800 million this year, and more than $1 billion in 2014, according to management guidance. Deutsche Bank has $24 price target. The consensus for the stock is considerably lower at $18. Investors are paid a 1.00% dividend.

Hercules Offshore Inc. (NASDAQ: HERO) is the small-cap stock to buy on the Deutsche Bank list. The company is enjoying a strengthening Gulf of Mexico pricing environment with leading edge jackup rates up 8% year-to-date and more than 50% versus the first four months of last year. The Deutsche Bank price target is $10, and the consensus is at $9.

Schlumberger Ltd. (NYSE: SLB) was another mega-cap giant mentioned in the report. Deutsche Bank expects it also to benefit greatly as the industry redeploys drilling rigs. The consensus price target for the stock is $91.50. Shareholders are paid a 1.60% dividend.

Weatherford International Ltd. (NYSE: WFT) hit a 52-week high last week. The company provides equipment and services used in the drilling, evaluation, completion, production and intervention of oil and natural gas wells worldwide. The consensus price target for the stock is $15.50.

The Deutsche Bank analysts continue to see the large-cap diversified service companies as best positioned over the balance of 2013. They also have noticed the U.S. land market bottoming out, led by pressure pumping and completion related services. The larger players, with their ability to bundle services and deliver the efficiencies that customers increasingly demand, seem to be taking share against this backdrop.

With the United States’ increasing role as a major oil exporter, domestic work should only increase for the top companies featured at Deutsche Bank. These top stocks to buy may be an investor’s best way to take advantage of this increase.

The Wall Street Journal reported the hiring this morning, citing “people familiar with the matter.” Lawler joined Anadarko in 2006 with the company’s acquisition of Kerr-McGee, where he had been employed since 1988. He is a petroleum engineer with long experience in operations.

Lawler’s selection is an interesting choice. Chesapeake’s problems stem from aggressive leasing followed by proving the presence of the resource and then flipping the property for a profit. As natural gas prices collapsed, the company took on a number of partners that were given a share of production in exchange for cash and promises to provide more cash for operations in the future.

The company’s CEO selection could have gone in several directions. One obvious choice would have been a financial wizard who could have sifted through the company’s assets, jettisoning the losers and strengthening Chesapeake’s free cash flow. The course the company’s board took, however, appears to be one in which it will seek to maximize the value of the properties it retained in order to keep its investors happy. Lawler’s operations background makes him a good fit for that role.

Like other producers of natural gas, prices below $4 per thousand cubic feet of gas have pressured revenues and profits for Chesapeake. Most observers and natural gas experts expect prices to rise this year and into next, with the most optimistic looking for prices to double. That will have a larger impact on Chesapeake’s cash flow than any CEO.

Chesapeake stayed within the industry with its new chief executive pick. That is just as well. Chesapeake is a complex energy company with equally complex financials. Marketwatch says of the new Chesapeake Energy CEO pick:

Chesapeake Energy Corp. has chosen Robert Douglas Lawler, a top executive at rival oil-and-gas company Anadarko, as chief executive, the Wall Street Journal reported on Monday. The 46-year-old will replace Aubrey McClendon, who was ousted from the second-biggest natural-gas producer in the U.S. in April. Petroleum engineer Lawler was senior vice president of international and deep-water operations at Anadarko

It is deepwater Lawler will have to get Chesapeake out of.

In something of a face-saving victory, Icahn did manage to put one of his three candidates on Transocean’s board. Sam Merksamer will replace board chairman Michael Talbert who had said he would resign from the board even if re-elected. He won’t have to write that resignation letter now.

Transocean’s CEO told The Wall Street Journal that the company “welcomes” Merksamer to the board and that there won’t be any issues with seating the new board member.

At its annual meeting yesterday shareholders did approve a smaller dividend payment of $2.24 a share that had been proposed by Transocean’s management and supported by to institutional investors’ advisory firms. The dividend will be paid in 4 quarterly installments of $0.56 a share beginning in June.

Shares of Transocean are trading down 1.8% at $53.76 in a 52-week range of $39.32 to $59.50.

The EIA reported that U.S. working stocks of natural gas totaled 1.96 trillion cubic feet, about 83 billion cubic feet lower than the five-year average of 2.05 trillion cubic feet. Working gas in storage totaled 2.66 trillion cubic feet for the same period a year ago. Natural gas inventories are roughly in the middle of the five-year range.

Recent mild weather over most of the country has diminished demand for natural gas in the past couple of weeks. The forecast for the next week calls for above-normal temperatures across most of the country, except along the Gulf Coast and the northern tier of stages from Washington to the Midwest. Natural gas futures dropped as low as $3.89 per million BTUs last week, after reaching a peak of $4.44 on May 1.

Here’s how stocks of the largest U.S. natural gas producers are reacting to today’s report:

Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, is down 0.4%, at $90.84 in a 52-week range of $77.13 to $93.67.

Chesapeake Energy Corp. (NYSE: CHK) is down 2.6%, at $20.11 in a 52-week range of $13.32 to $22.97. Chesapeake’s share drop is largely due to a downgrade to Neutral from J.P. Morgan.

EOG Resources Inc. (NYSE: EOG) is down about 0.9%, at $133.53 in a 52-week range of $82.48 to $139.00.

The U.S. Natural Gas Fund (NYSEMKT: UNG) is down 2.9%, at $21.36 in a 52-week range of $15.18 to $24.09. The Market Vectors Oil Services ETF (NYSEMKT: OIH) is up fractionally, at $44.31 in a 52-week range of $32.54 to $45.12. The first fund tracks spot prices; the second includes major drillers and services companies.

Total gasoline inventories increased by 2.6 million barrels last week and have moved into the upper half of the five-year average range. Total motor gasoline supplied averaged 8.5 million barrels a day over the past four weeks — a drop of about 3.1% compared with the same period a year ago.

Distillate inventories rose by 2.3 million barrels last week and remain in the lower half of the average range. Distillate product supplied averaged more than 3.6 million barrels a day over the past four weeks, down about 3.1% when compared with the same period last year. Distillate production totaled 4.6 million barrels a day last week, higher by 100,000 barrels compared with the prior week.

The American Petroleum Institute last night reported an inventory build of 1.1 million barrels in crude supplies last week, together with a decrease of 480,000 barrels in gasoline supplies and a rise of 1.9 million barrels in distillate supplies. Platts estimated a build of 300,000 barrels in crude inventories, a drop of 800,000 barrels in gasoline inventories and a rise of 800,000 barrels in distillate inventories.

Crude prices were down about 1.4% before the EIA report at around $93.00 a barrel and fell to $92.66 shortly after the report was released.

For the past week, crude imports averaged more than 7.6 million barrels a day, up about 17,000 barrels a day from the previous week. Refineries were running at 88% of capacity, with daily input of 15.3 million barrels a day, about 73,000 barrels a day more than the previous week.

The drop in crude oil inventories combined with the sharp rise in gasoline inventories signals that gasoline demand is down and that gasoline prices will follow. Crude prices will follow gasoline prices downward. This should be no surprise to anyone who has paid attention. Consumption (as measured by product supplied) is down another 3.1% this week. U.S. consumers are catching a break ahead of the summer driving season.

The United States Oil ETF (NYSEMKT: USO) is down 2.1%, at $32.86 in a 52-week range of $29.02 to $37.17.

The United States Gasoline ETF (NYSEMKT: UGA) is down 1.6%, at $55.39, in a 52-week range of $45.13 to $65.86.

The United States Brent Oil ETF (NYSEMKT: BNO) is down 1.2%, at $77.06 in a 52-week range of $63.00 to $88.71.