I think that a deal like Suncor (SU) and Petro-Canada (PCZ) is great for the oils. It makes me recognize that there is value here in the group. I also believe the demand is real.

I think that a deal like Suncor (SU) and Petro-Canada (PCZ) is great for the oils. It makes me recognize that there is value here in the group. I also believe the demand is real.

When I talked Monday night with Herbjorn Hansson, the CEO of my favorite tanker company, Nordic American Tanker (NAT), he confirmed that China is taking all the oil we can ship there, in part because they are buying cars like mad, no doubt because of their real stimulus plan that has put money to work and has given consumers money to spend on consumer durables like cars.

Perhaps what is going on is something that Schlumberger (SLB) suggested on its call: The decline in drilling is so great that oil will go up and therefore the cycle down will be truncated and go right back up.

I think it is all too wishful. I do believe that Transocean (RIG) can be played simply because the deepwater drilling takes so long that arguably we are going to get higher prices in 2012 and on. So why not hire Transocean?

Otherwise, call me skeptical. Keep buying companies like ConocoPhillips (COP) and BP (BP), and if you have to buy the drillers, buy Transocean and Schlumberger since Transocean's got the orders and Schlumberger's got the vision.

Otherwise, call me skeptical. Keep buying companies like ConocoPhillips (COP) and BP (BP), and if you have to buy the drillers, buy Transocean and Schlumberger since Transocean's got the orders and Schlumberger's got the vision.