Oil Holds On to Its Sweet Spot in 2005

You want non-battleground situations, where the numbers are going to be higher than expected and the outlooks better than expected? You want situations where executives aren't cautious but are downright bullish?

Don't despair. They exist. In fact, they are all clustered in one place: the Goldman Sachs Energy Conference that's been going on Tuesday and today. One company after another is trying to explain why a whole industry is in the sweet spot. Tuesday it was the integrateds; today it's the drillers. All are saying that even if natural gas goes down $2 and oil $10, the numbers are not a problem. Which makes me wonder, "What the heck happens if things stay the way they are?"

My friends who are attending the conference are spending all of their time just trying to figure out which stocks have the best story. I hear nothing but good things about Murphy Oil (MUR - commentary - Cramer's Take), Devon (DEVN - commentary - Cramer's Take) and about National Oilwell (NOI - commentary - Cramer's Take). I would be remiss if I said that anyone had a bad word to say.

These stocks got killed this year already, in part because of comments made by Anadarko (APC - commentary - Cramer's Take) about cutting back drilling. No one else said anything like that at this two-day conference. But those are the only comments that have made it onto the tape since 2005 began.

Opportunity? I wouldn't wait until people got back from the conference to buy these stocks.

The hedge funds all want 2005 to be about something new, something different. But the big mutual fund guys? They want to buy these stocks, especially at a discount.

These stocks work. If you can't buy an individual oil stock, I like Philly oil service index calls deep in-the-money or the ETFs.

You simply have to have some exposure to this group, especially those of you in the myopic world of AMD (AMD - commentary - Cramer's Take) and Intel (INTC - commentary - Cramer's Take) world. And I love Intel!

---

At the time of publication, Cramer was long Intel.

James J. 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. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]. Listen to Cramer's RealMoney Radio show on your computer; just click here. Click here to buy Cramer's latest book, "You Got Screwed!" Click here to order Cramer's autobiography, "Confessions of a Street Addict."