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Dicker and Cramer: Oil Under $100/Barrel Confounds but Won’t Last Long

Stocks in this article: NBL EOG APC XEC PXD


NEW YORK (TheStreet) -- Oil has been under $100 a barrel in the last week, a prospect I did not see as likely. I spoke about this strange discount in the price of oil with Jim Cramer and the opportunities I see in an oil market that is surprisingly "on sale."

I have never seen global oil supplies in as sharp risk as they seem to be today. There is continuing unrest in Ukraine and resultant tensions between Russia and the EU. There is a continuing Syrian conflict. Kurdish oil resources are at risk in Iraq. Libya cannot find a stable government to administer its oil resources in the East of the country. I could go on.

Yet, oil has dropped significantly, going under $100 a barrel for the first time in months.

Read More: Why ConocoPhillips Is the Energy Sector's Best Bargain/a>

This has been accompanied by a significant drop in the oil stocks of U.S. oil exploration and production companies.

But I do not believe that the lower prices in crude oil will last long. I continue to believe that oil will make a higher low for 2014 than it made in 2013, which was higher than in 2012 and so on -- that indicates to me that the bottom on oil is on a few dollars away, if that much.

Read More: Here Is Where Kinder Morgan's Capital Would Do the Most Good

It also means that oil stocks are being put very much on sale, and the opportunity lies in buying these names as they come down in price along with the price of oil. I give out specific targets for buying U.S. E+P stocks like Noble Energy (NBL) , Anadarko Petroleum (APC) and others in my columns on RealMoney.

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time. Jim Cramer's charitable trust, Action Alerts PLUS, is long APC.

Follow @dan_dicker

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

TheStreet Ratings team rates NOBLE ENERGY INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate NOBLE ENERGY INC (NBL) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. You can view the full analysis from the report here: NBL Ratings Report

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

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