One of the big ways to play the oil price spike is to get in on producers, according to Morgan Stanley, and Societe Generale’s team have outlined 6 big European names worth buying right now.It’s not all about the situation in the Middle East though, as much of the reasoning behind this play is actually more company specific, with many of the major integrated oil firms successfully bouncing back from difficult years in 2010.
Societe Generale’s 6 big calls:
- Gazprom: Prices for natural gas are rising in Russia, natural gas producers are coordinating more in the global market, and the company is on the brink of its first big Asian export deal.
- Lukoil: The company is moving past its tax issues in Russia, solidifying its path for future investment.
- OMV: Short-term problems in Libyan market outweighed by the fact the company’s earnings increase 2.4% every time Brent Crude goes up a dollar.
- Repsol-YPF: Adding more resources in Brazil while plotting big sale in its YPF holdings.
- Total: The company was hit hard in 2010 by slow growth, but that looks likely to change in 2011 with the company having solidified a more long-term growth strategy.
- The Big Winner is Shell: The company is on the brink of delivering several major projects at a time when oil is priced around $100 a barely, which should make its returns larger than expected.