Oil Stocks Making a Comeback?
While the stock market has rallied significantly this year, largely on the back of banks and financial companies, one sector that has not felt the love has been big oil.
Who could blame investors?
With the Obama administration injecting itself into the marketplace and all the talk about global warming, major oil companies like Exxon and Chevron are actually down a few percentage points from where they started this year. And if you look back to last summer, Chevron, for example, traded over $100 last May.
It's fallen as low as $55 and only recovered to about $70.
With generally good demand for oil pushing the price from $64 to $74 per barrel in the span of a month, and strong profits and cash positions, it might be time for the oil companies to start to move.
Dr. Stephen Leeb, editor of The Complete Investor, wrote today that: "Right now, increased demand for oil stems from the part of the world where economic growth is highest – the emerging economies and especially China. Overall, Chinese industrialization, infrastructure building, and the rise of its consumer should prevent any collapse in oil demand."
Will Chevron ever see those $100 per share levels again? Maybe not this year, but if the Obama administration can just keep themselves quiet, the major oil players are well positioned to lead the next leg of the rally on the back of growing international demand.
Please, Mr. President, stay on vacation for a little bit longer.