Oil, the main generator of energy on the planet, has the power to swing the market, said Aaron Task on Jim Cramer's
"RealMoney" radio show Monday.
Cramer had called oil the one product that could swing the market at will on his June 5 show, saying that oil also determines whether we're having a good or bad day in the market.
It's a good day when oil is down, and a bad day when it is up, he had said, adding that the threats to crude's supply and demand, and geopolitical news are two factors that affect oil's price.
Iran is threatening to stop its supply of oil to the U.S., and there are stories that Iraq's pumping ability is so weak it can't even supply oil to its own people Cramer had said.
And rumor has it that Saudi Arabia is running out of oil, he had added.
There is a lesson here: The current oil market is the reason you should get into oil stocks, Cramer had said. Even though oil is up, oil drillers are down huge.
Task welcomed Chris Edmonds, the managing director of research at
Pritchard Capital
and contributing writer to
RealMoney.com
, onto the show.
Task asked for Edmonds' thoughts on whether the U.S. is on its way to getting decent oil production from Iraq.
U.S. is a ways from meeting full demand because of infrastructure issues, but Iraq is slowly coming back to the positive part of the ledger, Edmonds responded.
Iran is threatening to stall exports if the dispute over its nuclear activity heats up, Task said. "What is your sense of these threats from Iran?" he asked.
"I think we have to take them seriously," Edmonds said. At end if the day, Iran is trying to make a name for itself and protect its own interests, he said, adding that Iran will probably be a volatile situation during the summer.
The back and forth will go on for a while, Edmonds predicted. It's not going to be resolved anytime soon, and the same conversation over the matter will probably ensue in September, October and November of this year, he said.
Referring to oil and gas producer
Anadarko Petroleum's
(APC) - Get Report
acquisition of two smaller competitors
Kerr-McGee
(KMG)
and
Western Gas
for $21 billion last week, Task asked Edmonds if he believed that this was a good deal for Anadarko.
Edmonds said that it was a good long-term deal for Anadarko because the company touted natural gas is the commodity of the future, and that's they we paid up for it, he said.
When Task asked Edmonds what the next likely takeovers in the arena are Edmonds said he liked
Devon Energy
(DEV)
, thought
Forest Oil
(FST)
was very interesting and called
Cabot Oil & Gas
(COG) - Get Report
less interesting.
In addition, he said
Pioneer Natural Resources (PXD) - Get Report
has been rumored to be a takeover for some time because it is cheap, but its assets are scattered.
Until it is focused on one area it's going to be difficult for it to be taken over, Edmonds said.
To see the most recent edition of The RealMoney Radio Recap in its entirety, please click here. This recap is published every day around 3 p.m. ET.
Aaron L. Task is the co-executive editor of TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships.
to send him an email.
