Do you think this week will finally end the oil inventory nonsense? Do you think this week could be the breakout where oil doesn't trade on the slight build or the "heavier than expected" chatter?
I sure hope so.
Yesterday was a horrible market, but midday, when the market was really beginning to roll over, the whole complex turned. This was quite an achievement given the overwhelming collapse of the futures and the propensity of the bears to push things down.
Today with the futures breaching $140 -- remember, I think they're on the way to $150 -- we can see the error of relying on these numbers, which I have said for years now are meaningless. Witness how many times the inventories have been more full than expected and yet oil has doubled.
I want to go back to the cheaper-than-oil stocks, though. Natural gas. Oil has to go down $65 to get to where natural gas is right now. Meaning that historically oil trades at six times the price of natural gas. So natural gas -- forget the season, which is supposed to be bad for nat gas -- needs to come higher.
Much higher.
We have lots of natural gas, more than can be stored; those inventories are particularly meaningless and can vanish with a couple of days of warm weather. We have abundant finds all over the country that were worthless pre-horizontal drilling, so the numbers for these companies are way too low. So are most of the pipeline companies -- did you see Williams' (NYSE: WMB) (Cramer's Take) numbers yesterday?
That makes the Devons (NYSE: DVN) (Cramer's Take) and the Southwesterns (NYSE: SWN) (Cramer's Take) -- WAY OFF THEIR HIGHS -- the best bargains in a market where almost no company can be assured to beat estimates. And I think that, like WMB, they will beat estimates handily.
Money has to go somewhere. Most mutual funds can't sit on cash. The complex is a growing part of the S&P, and this is the cheapest part of the complex.
I would use more futures weakness this morning to buy these stocks for the biggest snapback of all the players out there.
All week I have been featuring oil service companies that reduce the risk of offshore drilling. I think we should be buying those, too. The "Mad Money" recap on our site has all you need to know about where to go. Check it out.
The bargains in this market are not Citi (NYSE: C) (Cramer's Take), Fannie (NYSE: FNM) (Cramer's Take), Merrill (NYSE: MER) (Cramer's Take) and GM (NYSE: GM) (Cramer's Take).
They're these stocks, because bargains are defined as companies that beat estimates but which are trading as if they aren't going to.
That's the natural gas complex.
That's the only place worth owning besides gold in this miserable market.
Random musings: You want the truth about oil speculation from a real expert? Dan Dicker has a column today that will knock your socks off.
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. At the time of publication, Cramer was long Devon and Southwestern.
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