A dip in the shares of British Petroleum (BP) was to be expected following the massive oil spill and the expected costs BP will have to incur. Some buyers took advantage of the over-selling and got a bargain. Next will be the profit-taking. Only after that cycle is complete will we begin to sense how the market will assign value to the Gulf of Mexico tragedy.

Meanwhile, shares of Chevron Corp. (CVX), Exxon Mobil Corp. (XOM) and Royal Dutch Shell (RDS) also took mild hits. The declines were most likely due to investors who don't want to keep money tied up long term in a sector that has just entered an indefinite period of instability. The hard-core oil bulls will claim that nothing has changed, but the fact remains that it's a new world for crude oil investments.

By and large, earnings expectations remain high as earnings season rolls on this week. Analysts surveyed by Thomson Reuters expect double-digit annual earnings growth from Avon (AVP), Kellogg (K) and Whirlpool (WHR) to Chicago Mercantile Exchange (CME), DuPont (DD) and Northrop Grumman (NOC).

Big Oil steps into the earnings spotlight this week as well. Wall Street is anticipating big profit growth from BP (BP), Chevron (CVX), ConocoPhillips (COP), which we look at more closely below, Exxon Mobil (XOM) and Royal Dutch Shell (RDS.A), as well as from Apache (APA) and Occidental (OXY). Even Hess (HES) is forecast to have swung to a profit from last year's net loss.

Royal Dutch Shell (RDS.A) closed at $59.62. Crude futures are recently down 0.78% to $85.21 according to Bloomberg. RDS.A over all option implied volatility of 20 is below its 26-week average of 23, according to Track Data, suggesting decreasing price fluctuations.

DJ US Real Estate Index Fund (IYR) closed at $50.96. IYR overall option implied volatility of 23 is below its 26-week average of 31, according to Track Data suggesting decreasing price movement.

Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Some trends are obvious enough and visible to all investors. Others are more-subtle, but are just as potent, and these often slip "under the radar."

Case in point: Royal Dutch Shell Plc (RDS.A), Europe's second largest oil company, expects natural gas production to become its dominant energy form, rising to 52% of output in 2012, Bloomberg News reported.

Shell is teaming up with China-based energy firms as it broadens its natural gas holdings. Shells shares rose 25 cents to $58.51 in Tuesday afternoon trading.

If you do business with Iran, it's probably going to be harder to get insurance coverage. Regulators and lawmakers in the U.S. are looking for stiffer penalties to thrust upon companies that do business with Iran. And insurers, likely acutely aware of how risk can spread, are starting to pull back.

Munich Re (0KFE) and Allianz (AZSEY) announced that they are suspending business in Iran, according to a report by Business Insurance. Neither company, however, stands to lose much. For Allianz, the lost premium is "negligible," and for Munich Re, it's only around $13.6 million.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Aflac Inc. (AFL) posted better-than-expected Q4 earnings, though revenue fell short, and offered rosy guidance.
• Avon Products Inc. (AVP) posted Q4 earnings growth that met analysts' expectations but shares sold off.
• Cisco Systems inc. (CSCO) higher Q2 earnings topped the consensus estimate but cash flow fell.
• CME Group Inc. (CME) fell short of analysts' Q4 profit expectations, resulting in price-target cuts.
• ExxonMobil Corp. (XOM) posted better-than-expected Q4 earnings and revenue that boosted shares.

Royal Dutch Shell's (RDS.A) profit fell a whopping 75% in the fourth quarter. Earnings came in at $1.18 billion.

Shell's profit margins were hit by slower fuel demand caused by the worldwide recession. There were also increased costs from refinery start ups in the Middle East and Asia.

Analysts surveyed by Thomson Reuters are looking for life insurance giant MetLife Inc. (MET) to report that its earnings rose 80.0% from a year ago to $0.95 per share for the three months that ended in December. Revenue, however, is expected to total $12.6 billion, which is down 10.1% from a year ago, during a fourth quarter in which it offered guidance and declared a quarterly dividend. The analysts' forecast for the full year calls for earnings of $2.89 per share (-25.7%) on $48.3 billion in revenue (-5.3%). This New York-based insurer's earnings results have been better than expected in three of the past four quarters, beating estimates by as much as 20 cents per share.

MetLife's long-term EPS growth forecast is 10.7%, which is better than that of competitor Prudential Financial Inc. (PRU), and its earnings multiple is 8.8x. The First Call consensus recommendation has been to buy MET for more than 90 days, despite a recent downgrade of the stock. The mean price target is $42.87. Shares have been trading between $32.00 and $40.00 since August and closed the week at $35.32.

Analyst upgrades:

• FBR Capital upgraded Overseas Shipholding (NYSE: OSG) to Outperform from Market Perform following the Q3 results as it believes the worst quarters are behind the company. The firm raised its target on shares to $48 from $35.
• Deutsche Bank upgraded Corporate Executive Board (NASDAQ: EXBD) to Hold from Sell following the Q3 results to reflect the company's lower costs. The firm raised its target on shares to $22 from $18.
• RBC Capital upgraded Enbridge (NYSE: EEQ) to Sector Perform from Underperform after the company's partnership produced significantly higher than expected DCF. In addition, the firm raised its price target by $5 per unit to $46 to reflect an improved distribution schedule and more favorable debt leverage.
• Royal Dutch Shell (NYSE: RDS.A) was upgraded to Neutral from Underperform at Credit Suisse.
• BioForm Medical (NASDAQ: BFRM) was upgraded to Overweight from Neutral at Piper Jaffray.
• Alliance Data Systems (NYSE: ADS) was upgraded to Buy from Neutral at SunTrust.

Demand rose after China eased restrictions on fuel prices last December, and that translated a record second-quarter profit for Asia's biggest refiner, China Petroleum & Chemical Corp., also known as Sinopec.

Beijing-based Sinopec's net income surged to 22 billion yuan ($3.22 billion) in the three months that ended June 30, according to estimates by Bloomberg News. That easily topped the analysts' consensus estimate of 15.8 billion yuan.

Who said big oil was a dying business? Fortune has released its Global 500, their "annual ranking of the world's largest corporations," and topping the charts is Royal Dutch Shell (NYSE: RDS.A), which, much like a Mariah Carey song, bumped up into the coveted number-one slot after some time at number three. The Netherlands-based oil company trumped its U.S. rival, Exxon Mobil (NYSE: XOM) by $15 billion in sales and saw its revenue spike nearly 29% from 2007.

Speaking of Exxon, the company once again had a tiger in its tank, ranking number two in the world as oil futures bounced around in a nearly $100-dollar range, hitting $146 per barrel at its heights.

Analyst upgrades:

• JPMorgan upgraded Franklin Resources (NYSE: BEN) to Overweight from Underweight to reflect performance and sales improvements, as well as benefits from the weakening U.S. dollar. The firm has a $94 target on the stock.
• Oppenheimer upgraded FormFactor (NASDAQ: FORM) to Outperform from Perform after channel checks indicated orders are recovering. The firm raised its target on shares to $30 from $22.
• KeyBanc upgraded Oshkosh (NYSE: OSK) to Buy from Hold citing the company's MRAP-ATV contract win, which they view as a "game changer." The firm has a $30 target on the stock.
• Novellus (NASDAQ: NVLS) was upgraded to Neutral from Underperform at Credit Suisse.
• Ternium (NYSE: TX) was upgraded to Buy from Neutral at Goldman.
• Cathay General (NASDAQ: CATY) was upgraded to Buy from Neutral at B. Riley.

When oil lost almost $3 a barrel, stock futures indicated a lower opening for today. Just shy of 5 AM, S&P 500, Down Jones, and Nasdaq 100 futures were all off 0.9%. The drop in oil to $64 a barrel has called into question any projections of a quick economic recovery -- as if high unemployment weren't enough. The Monday after any long weekend is hard, and this one's going to hurt.

The direction in which futures are pointing continues Thursday's equity declines in the United States, bringing the S&P 500 its third consecutive weekly loss. For the day, it lost 2.91%. The Dow Jones Industrial Average lost 2.63% of its value, with the Nasdaq Composite Index giving up 2.67%. Year-to-date, the DJIA is down 5.6%, the S&P 500 down 0.8%.

"One of the 'super five' integrated oil and gas companies, Royal Dutch Shell (NYSE: RDS.A) has a diversified portfolio of oil and gas assets around the globe," says international investing expert Nick Lanyi.

In High Yield International, he says, "As one of the more conservative plays on a falling dollar and a rebound in oil & gas prices, I am adding Royal Dutch Shell -- yielding of 5.8% -- to our 'Reliable Income' portfolio."

"The Amsterdam-based company's revenue is more gas-oriented than its other super-major peers; about 40% of production is natural gas.

"In addition, Shell is more focused on unconventional sources of oil and gas than most -- the company plans to derive more than 10% of its revenue from sources such as oil sands and liquefied natural gas by 2014. This coincides with Shell's long-standing reputation as an industry leader in technology and engineering.

Exxon Mobil (NYSE: XOM) closed at $77.57. Crude oil futures are recently down 5.88% to $38.43 according to Bloomberg. The WSJ says: "XOM is poised to grow even bigger by acquiring a rival energy company or entering a partnership with an oil-rich nation in need of capital." February option implied volatility of 47 is above its 26-week average of 36, according to Track Data, suggesting larger price fluctuations.

Royal Dutch Shell (NYSE: RDS.A) closed at $53.98. The WSJ says one of the many scenarios suggested by observers is XOM buying RDS.A. RDS.A overall option implied volatility of 41 is near its 26-week average according to Track Data, suggesting non-directional fluctuations.

Amex Energy Select - XLE closed at $48.64. XLE February option implied volatility of 55 is above its 26-week average of 48, according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com