It's All About the Deepwater Rigs

Food and fuel. Any kind of fuel. Any kind of food.

That, again, is today's action. Not Bernanke, and not earnings. We are running out of fuel, and we are using too much food for fuel, and it is again driving up the same suspects -- the majors, the natural gases, the seeds, the ag -- aided by Nigeria for oil and the ridiculous farm bill for the ag cohort.

And it all makes sense.

There is a fabulous story out of Bloomberg today about how Petrobras (PBR - commentary - Cramer's Take) is trying to tie up as many deepwater rigs as possible for three-year extensions.

This is an amazing story, because everyone -- every major country and company -- wants those rigs. EVERYONE. Go listen to the Transocean (RIG - commentary - Cramer's Take) conference call!

The difference is that we were worried about 2012 on the call because we didn't have all the visibility that we needed. Presto: We have visibility with this story.

PBR has a giant find offshore and it is worth it to pay whatever rate RIG charges -- they are really the only company with anything that can be described as "spare" capacity -- which could be over $700,000 a day. The real takeaway though is that there could be a bidding war for these rigs, as other companies cannot allow PBR to get those rigs. They are too scarce.

Two takeaways: RIG can still be bought, and National Oilwell Varco (NOV - commentary - Cramer's Take), which makes the rigs, just got five more years of visibility. Buy away!

At the time of publication, Cramer was long National Oilwell Varco.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.