If you believe, as I do, that crude prices must be close to their bottom -- and that slowing production could drive prices towar $60-$65 a barrel by the end of this year -- you're looking at a 40% pop. If I'm correct, this is probably an excellent time for those with a taste for energy to start seeking out companies that might make money this year.
My top pick among the Big Oil integrated group -- where I believe the best plays in the sector can be found -- is ExxonMobil
But I also wouldn't pass on BP
But perhaps most importantly, BP seems to have mended its difficulties in Russia, where its TNK-BP partnership accounts for fully a quarter of its global production and about a fifth of its worldwide reserves. And as if all that weren't enough, the company's dividend continues to yield more than 8%.
Conoco recently announced that it'll lay off about 4% of its workforce, and it's bearing down on asset writedowns totaling about $34 billion, including a cut in the value of its 20% share in Russia's biggest oil company, Lukoil (OTC BB: LUKOY). But the write-offs are non-cash, and since the objective of investing is to buy low and sell higher, you could team up with Warren Buffett, Conoco's largest shareholder, and likely do good things for your portfolio over time.
On the oilfield-services side, I'd patiently limit myself to Schlumberger
So take a careful look, Fools. I'm not suggesting that you gorge yourself on the group, but I also wouldn't be unrepresented in what could be a profitable sector over the next year or two.
Of the companies mentioned above, BP, ConocoPhillips, and Transocean are all rated five stars by Motley Fool CAPS. Do those ratings include your votes?
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