Positive Signs in the Oil Patch

This column was originally published on RealMoney on Feb. 2 at 7:24 a.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

We found out yesterday what happens when earnings peak in the oil patch, but the numbers are great anyway: The stocks go up.

When you get a magnificent quarter, as you did yesterday with Exxon (XOM Quote), but the earnings are down 4%, you would expect the growth hounds on the Street would run from it. Nope, they bought it.

They did the same to Royal Dutch (RDSA Quote), which, at last, is out of the doghouse because of its high replacement rate, although it is using tar sands in its calculations.

And they did the same to Chevron (CVX Quote), even though it hadn't reported yet.

These are all great signs for a group that has been viewed as finished. One of the reasons is that they are making too much money to ignore. They are buying back shares and paying dividends like mad.

Still, it is an amazing change, as very few groups have ever been able to resist the gravity of down earnings. This group is one of them.