Monday, August 6, 2007

More On Transocean

Oil Stocks Look Good on Overdone Selloff

Sorry, but I can't back away from the oils or the oil drillers here. They had that huge run up and now are pulling back so heavily that you have to presume that oil, the commodity, is going to the $60s. I am not buying it. I think that oil could be heading down, but this selloff is overdone. Here's why: 1. It is true that most oil companies did not grow their reserves this quarter. That's what I keep hearing is the reason for the downturn. But many did: XTO, Devon, Anadarko and Apache, for example. 2. Those who didn't grow, which includes ExxonMobil and Occidental, have to drill more. The CFO of Occidental said that to me on Friday's "Mad Money". 3. The offshore drillers in particular are acting totally nuts. Who knows where Transocean would be if it chose not to do a deal? So what's going on?...

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