Oil at $110? Watch These Names Now

Piercing $110 in crude means that an out-and-out increase in day rates can be sustained. That's what's behind this remarkable next leg up of drillers and drilling equipment stocks. This move is about number bumps, just like natural gas earlier today.

Many of the owners of these stocks have had one foot out the door ever since we heard Schlumberger (SLB - commentary - Cramer's Take) say that 2008 was a "transition" year, Wall Street gibberish for "your numbers are too high." But with this sudden whoosh up, it is hard to imagine that every company in this business, particularly the offshore plays like Transocean (RIG - commentary - Cramer's Take) and FMC (FTI - commentary - Cramer's Take), is having a "transition" year.

As long as oil maintains this trajectory -- and remember, I am using $125 and have not varied -- you can pretty much bet that earnings are too low.

That's what's going to drive these stocks and ag and nat gas. Oil at $111, no matter how artificial -- wait until we hear about all of those who say that this is about speculation -- means more plantings (Mosaic (MOS - commentary - Cramer's Take), Agrium (AGU - commentary - Cramer's Take), Potash (POT - commentary - Cramer's Take)), more drilling (RIG), and higher prices for gas (XTO (XTO - commentary - Cramer's Take), Apache (APA - commentary - Cramer's Take), Anadarko (APC - commentary - Cramer's Take), Southwest Energy (SWN - commentary - Cramer's Take), Chesapeake (CHK - commentary - Cramer's Take), Devon (DVN - commentary - Cramer's Take)).

In a word: Relentless.

At the time of publication, Cramer was long XTO.

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