These energy stocks are driving people crazy because every time oil goes up too high, we know the sellers come out and the stocks get banged down, but then when you see anything positive about any inventory number, it starts all over again.
So let's be clear about this. You can't buy any of these stocks on days when oil is running. You can't because they drop so hard on a day when it goes down.
We have had a short-covering pattern that goes on almost every single Friday; if you get a decline tomorrow you might get a chance to buy.
But I would stick with an EOG Resources (EOG) or an Occidental (OXY) or someone who doesn't need capital or wait for an equity deal to be filed. Just going in and buying might be a little reckless. (Occidental is part of TheStreet's Action Alerts PLUS portfolio.)
I am not changing my long-term view that fossil fuels are increasingly uninvestable. I am still very worried about all of the master limited partnerships. There's too much pipe. I don't like the Bakken players, they are too expensive.
But if a company has cheap Permian and cheap Eagle Ford and real good Oklahoma properties, then I think it's going to work. A piece this morning by RBN Energy spelled out exactly how hard-hit the Bakken is right now, and you have to look over your oil companies very carefully to see if they have too much Bakken or too much natural gas, because if they do I can tell you their equity offerings are not going to be all that well received.
So stick with quality if you must. Wait for equity offerings for the rest. And accept that $26 a barrel is increasingly looking like the low for this cycle.