SLB Schlumberger Ltd

For Immediate Release

Chicago, IL – February 24, 2012 – Today, Zacks Investment Ideas feature highlights Features: Chevron ( CVX). Exxon Mobil ( XOM), ConocoPhillips ( COP), Halliburton Company ( HAL) and Schlumberger ( SLB).

How to Play the Texas Tea Momentum

In May 2008 a call from a major brokerage was heard round the world. It was the “super spike” in the price of oil which called for prices to dramatically increase from the $115 level to an unthinkable $150-$200 a barrel. This call came from the same analyst that three years earlier saw $100 barrel crude when sweet Texas tea was hovering close to $60. The earlier call was also a somewhat unthinkable prospect.

Recently, we got another call from the same brokerage… just a different analyst this time. The call isn’t quite the same, but the idea is. Oil prices are expected to move higher. We will leave the details of Iran or supply and demand out of this discussion and focus on how we can best position our portfolio based on this move.  Of course you'll need to agree with the basic thesis that oil will be moving higher and have some faith in Goldman Sach's and thier research.

Who Benefits

The immediate thought of who benefits rests with the largest players in the oil patch. Chevron ( CVX), Exxon Mobil ( XOM) and ConocoPhillips ( COP) come to mind. The services like Halliburton Company ( HAL) and Schlumberger ( SLB) could also see some benefit as a result.

One area that could see exaggerated benefit would be the drillers. As oil prices continue to increase, the willingness of speculators to search new sources of oil should lead to gains for the drillers. Those that are successful at new holes in proven reserves are even more attractive.  

Conclusion
Higher oil prices pump a crimp on all spending in the US economy, but some sectors feel the pain more than others. Airlines and automakers bear the brunt of it, but higher fuel costs send prices higher on just about everything from food to computer parts. That does not mean we cannot find a few areas of strength to take advantage of big moves in the price of oil.  Alternatives like wind, solar and nat gas should also see a rise in prices.  Look for the "best in breed" in each alternatives sector to be rewarded if oil prices continue to rise.  

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CONOCOPHILLIPS (COP): Free Stock Analysis Report
 
CHEVRON CORP (CVX): Free Stock Analysis Report
 
HALLIBURTON CO (HAL): Free Stock Analysis Report
 
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
 
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
 
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