NEW YORK (TheStreet) -- I was talking to Jim Cramer today about oil and the recent weakness of domestic exploration-and-production companies and where there might be remaining opportunities in the oil patch.

There has been a continuing glut in Cushing, with six straight weeks of oil stockpile builds. That has put pressure on domestic oil prices, now seemingly in a range from $93 to $96 a barrel. But global oil prices remain at more than $100 a barrel because of continuing unsettled negotiations with the Iranians over their nuclear aspirations, the continuing unrest in Egypt and the total shutdown of production in Libya from a new civil schism.

All of that has led to a strong difference between U.S. and global crude oil prices, driving the profitability of the refiners, a sector I have been highlighting as the place to be in the oil patch in the fourth quarter. Until those differentials relax from the double digits they've been at, I still believe this is the place to be, with stocks including Tesoro (TSO), Valero (VLO) and Phillips 66 (PSX).

As for the exploration-and-production companies, investing in them requires caution. Although I don't think the thesis of U.S. oil production has entirely run its course, there needs to be a stronger correlation between U.S. and global crude prices to drive these companies' shares higher from here.

One exception has been Devon (DVN), recently in a deal to buy an Eagle Ford shale producer in GeoSouthern. But despite my recommendation of Devon as an undervalued exploration-and-production company, this $6 billion deal is a stronger recommendation for the private equity company that is cashing out on it: Blackstone (BX).

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