Secondary Oils Race to First Place

Laggard oils playing catch-up? When I see Occidental (OXY - commentary - Cramer's Take) up huge, and Cimarex (XEC - commentary - Cramer's Take) and Houston Exploration (THX - commentary - Cramer's Take) surging, while Exxon (XOM - commentary - Cramer's Take), Chevron (CVX - commentary - Cramer's Take) and BP (BP - commentary - Cramer's Take) do next to nothing, I wonder if we are, at last, going to the unexploited plays. Throughout this period I have been amazed at how poorly the secondary oil plays have acted. They simply can't seem to advance, and they give back more than they should on down oil days, even though they are much more levered to the price of oil than the majors.

I regard this move as an important broadening of the petrol rally. These stocks, as well as some drillers, haven't moved at all. Many are where they were when oil was at $50. That's kind of nutty, because many of these companies are levered one for one with crude.

I believe that some of them are being kept back by an attitude that says they have too much natural gas so they can't do as well year-over-year. But the stocks with minimal natural gas simply weren't advancing, either.

In many ways, I am more certain of the oils than I am of the minerals and the titanium plays. The latter are levered to aerospace, which, while it is in bull-market mode, still is subject to having more plants built. There is also an abundance of aluminum and zinc; we just weren't prepared for such a surge. At a certain point, more steel mills will be built and we will be in less of a bull-market cycle there.

With oil, though, we are in short supply, period, end of story. This catch-up move makes all the sense in the world and is much needed for the complex.

Random musings: Cisco (CSCO - commentary - Cramer's Take) is really getting to be cheap again. I see that people are selling it off Bookham (BKHM - commentary - Cramer's Take). Oh man, is that wrong. Northgate Minerals (NXG - commentary - Cramer's Take) is for real, but who knows what it is worth? Tough to tell, but seems like it is an interesting spec, although it has moved a lot. But what hasn't, in that cohort? ... Krispy Kreme (KKD - commentary - Cramer's Take) delays its 10-K again. What the heck are people trading on with this? The taste of doughnuts?

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At the time of publication, Cramer was long Occidental Petroleum.

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