For Big Oil, $100 Oil Is Window Dressing

NEW YORK ( TheStreet) -- Big profits won't be enough for Big Oil.

Even if high oil prices will make for some easy year-over-year comparisons for integrated oil majors, it's already reflected in stock prices. Add to this macroeconomic headwinds, and investors haven't shown a willingness to buy on earnings beats this quarter.

Fadel Gheit, analyst at Oppenheimer & Co., says the integrated oil majors need to at least meet or beat expectations just to keep their heads above water.

The standard bearer of Big Oil, Exxon Mobil ( XOM), reported disaapointing results on Thursday morning, with its second quarter earnings coming below even the lowest Wall Street estimate, and its shares fell by 2%. Exxon Mobil production lagged Wall Street models and its costs went up while margins took a dip, the epitome of a less than perfect earnings report, if not a major needle mover for shares. The headline from Exxon Mobil of a 41% rise in profits meant little compared to the negatives in the report.

Analysts don't have great expectations that earnings will send integrated oil shares higher from here. In fact, merely turning in a ho-hum profitable quarter has been met with a yawn from investors.

"I don't see much difference between the oil majors and the independent exploration and production companies. They are all trading together now and it's not an opportune entry point," said Alex Morris, analyst at Raymond James.

ConocoPhillips ( COP) had one of the best stories headed into earnings season with plans to spin off its refining business, a means to unlock value in its shares, as well as its continuing asset divestiture plan.

Oppenheimer's Gheit says the beat that ConocoPhillips posted on Wednesday didn't change the fact that it's more of a 2012 as opposed to 2011 story.

"The spinoff will create value and exceed people's expectations, but right now, the improvement in earnings has nothing to do with oil companies working harder and the market won't provide oil companies with any slack," Gheit said.

ConocoPhillips has, though, turned in the best earnings report of the Big Oil sector, and the only clean report set against the results from BP, Exxon Mobil, and Royal Dutch Shell.

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