NEW YORK (TheStreet) -- Jim Cramer, portfolio manager of Action Alerts PLUS, believes oil prices are in the process of bottoming out, and he likes Occidental Petroleum (OXY) - Get Report and EOG Resources (EOG) - Get Report .
Cramer said Occidental has the best cash flow to cover its dividend, and EOG, while it has shut down a lot of projects, has said it could restart them when oil rebounds. Cramer also said ExxonMobil (XOM) - Get Report is going to look interesting again. But he added investors shouldn't buy Marathon Oil (MRO) - Get Report , because it's challenged on its dividend.
Cramer said he bases his assertion that oil is near its floor on comments made by two people he really trusts: Real Money energy expert Dan Dicker, and Cheniere Energy (LNG) - Get Report CEO Charif Souhki. Within a span of a few hours on Monday, both Dicker and Souhki came out and said a bottom is being put in the oil market. He notes that were both bears on the oil market who turned bullish.
"Dan Dicker was someone who said listen, oil was going to go much lower when it was the $70s, $60s, $50s, $40s," explained Cramer. "It's interesting that in the high $30s, he said, 'You know what, this is the level where I thought it would go,' and he turns bullish when a lot of people turn bearish." He pointed out that Souhki had also been bearish when oil traded at high levels, and became bullish when oil broke below $40 a barrel.
Cramer recently wrote that Souhki had pointed out one reason the market could be done going down is because the Saudis have activated all of their spare capacity, and are now faced with a necessity to let oil prices go up, suggesting that they just can't keep pumping at this pace. Cramer added that short sellers are behind the recent moves in the oil market, but it's also true that there are plenty of wells that are viable at current oil prices.