Philip Weiss of Argus Research said his top picks in the sector in the midst of the turmoil in the Middle East are ConocoPhillips (NYSE:COP) and Halliburton Co. (NYSE:HAL).
While this week’s oil price spike above $100 a barrel and turmoil in the Middle East raises uncertainty about energy supplies, companies in the business of drilling and producing oil continue to fare well in the U.S., but refining operations may find themselves under pressure.
With political violence in Libya causing oil to move into the triple-digit range for the first time in three years, experts are predicting a long period of unrest throughout the region and challenges for parts of the energy sector.
Meanwhile, companies in the business of alternative energy said they noticed an uptick in interest from the financial community in recent days.
“If you have refining operations, it’s not so great,” said Philip Weiss of Argus Research, pointing out that raw material costs for making gasoline and other fuels will go up with the price of oil. “In general it’s harder for refiners to keep up with rapidly rising prices.”
He said oil service companies will benefit as higher oil prices make it more economically feasible to boost spending on exploration. Companies that specialize in producing oil will also fetch higher prices for their crude.
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