Get used to energy prices at these higher levels. "Energy prices are in a permanently higher echelon," Jim Cramer said on TheStreet.com TV's Wall St. Confidential video Tuesday.
Which companies stand to benefit?
all "have a great book of business," even though they haven't been great performers, he told Aaron Task, the host of Wall St. Confidential.
What this tells us is that the only place that's doing well is deep-water reserves, Cramer said. However, it is very difficult to get at deep-water oil sources, which is why oil is higher, he explained.
The profits at
have a lot to do with the fact that the company is using oil it found when prices were much cheaper, Cramer continued, but this will come to an end.
Taking a longer-term view of oil and natural gas, "It's inaccessible," Cramer said, adding that while we're not running out of oil, we're only finding it in places that are expensive.
"You can't expect oil to go back to $30, $40; and on the demand side you can't expect China and India to use less," Cramer said. "You have this great combination that's going to keep the equilibrium higher than it used to be."
When Task pointed out that Exxon is still looking at forecasts where it wants to drill at $30 to $40, Cramer said he questions this because Exxon just negotiated an "unfavorable" contract with Venezuelan President Hugo Chavez.
"You don't negotiate unfavorable contracts with dictators if you really and truly believe oil is coming down," he said. "You walk away from the table, and Exxon did not. To me, actions speak louder than words."
On the natural gas side, Cramer said that because it has never been "well stored" in the U.S., when it's warm there's no place to put it so it comes down. And when it's cold, natural gas gets used up quickly, which causes the price to go up.
What's interesting here is that Canada didn't drill a lot of natural gas, which Cramer believes is "related solely to the ridiculous and moronic approach of the Canadian government to make it so that the main companies that were profiting from natural gas lost their protected status."
This made it seem as if natural gas was finished, he said, whereas, in fact, "It's not finished at all."
both had good numbers recently.
But in the case of Halliburton, the perception is the numbers are worthless because of its natural gas component, Cramer said. Many of the analysts have decided to go long the
Oil Service Holdrs
and to short companies that can't be taken over, he said.
Halliburton has been the "whipping boy" and its short position has increased "incredibly," Cramer went on to say. But if it takes action and buys a company or changes the way it's going to distribute
in the spring, "the shorts will then have huge, huge problems."
As for individual investors, when Task asked how one would invest in asset types such as copper when all of the hedge funds are targeting them, Cramer advised buying
, "which has a good yield."
He believes copper will be in short supply in the long run because hybrid batteries in cars use a "gigantic amount" of the mineral.
At the time of publication, Cramer was long Transocean and Halliburton.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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