The Return of “Big Oil”?

Big Oil’s time has come. It is a trend that has been developing with the higher oil prices. I believe we will see a return of “Big Oil” long term, contrary to comments from others.

The market was down 200 pts yesterday, oil prices were up and Big Oil was up. What does that tell you?  Sounds like good relative strength to me. I don’t know about you, but I tend to want to buy stocks with good relative strength.

Most of the market has been focusing on oil services and E&P the past 2 years, rather than super major integrated oil, aka “Big Oil”.

Big Oil is still undervalued based on NAV of reserves. As long as oil prices remain high, and reach a new plateau for the trading range, which I think it has, Big Oil is a good way to play energy.

The challenge, as always, is how they will grow or even maintain reserves. I would expect they will be buying up leases, U.S. E&P companies, and second and third tier players each time oil trades in the lower end of its trading range, which I think is now $90.

Names: [[CVX]], [[COP]], [[BP]], [[XOM]], [[PBR]], [[STO]]

I also like these U.S. E&P companies: [[APC]], [[APA]], [[DNR]], [[FST]], [[OXY]], [[UPL]]

Hot area/ Bakken Shale (ND): [[EOG]] and [[BEXP]]

Disclaimer: This information is not intended to be used as the primary basis of investment decisions.  Because of individual investors requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. Consult your financial advisor prior to taking any actions. The information and opinions contained here are those of the author and are not necessarily the same as those of iBankCoin, its principals or its affiliates. The author may have a position in one or more stocks mentioned here. Trade at your own risk.