Is Now The Time To Buy Energy Stocks? (COP, APA, CVX, APC, XOM, MRO, BTU, WPRT)

Michael Crofton of Philadelphia Trust Company and John Kilduff of Round Earth Capital talked about energy stocks with CNBC's Simon Hobbs. Michael Crofton thinks that oil is probably the cheapest commodity right now. He added that oil is down 15% since the end of the quarter, and if you accept the assumption that economy is recovering, we are going to see oil moving up. Mr. Crofton continued by saying that we are not discovering any new oil and we are not going to use less oil over time. John Kilduff agrees that oil is cheap now, and recommends investors buy ConocoPhillips

, Chevron Corporation

, Apache Corporation

and Anadarko Petroleum Corporation

. He thinks that these companies have size and stature that will help them to emerge as the winners in this situation. Only the biggest companies will be able to drill in the Gulf of Mexico, because they will be able to afford insurance. Michael Crofton likes Exxon Mobil Corporation

, ConocoPhillips (

), Marathon Oil Corporation

, Peabody Energy Corporation

and Westport Innovations Inc. (

)

. In the oil space he picked APC, COP and MRO because of their exposure to both oil and natural gas. Coal and natural gas are two fuel sources that can replace oil, and Peabody Energy (

) is an improtant company in the coal space. Westport Innovations (

) are converting diesel engines to natural gas which is a very important source of fuel savings. Michael Crofton thinks that in the long term there is a lot of upside potential for these stocks. With problems in Europe and inflation in China, we have to ask ourselves if economic recovery is still intact. If China raises its interest rates, oil will continue to struggle. Michael Crofton thinks that economic recovery is fragile, but still intact and if we see a downward scenario in oil, then it will be even more attractive for long term investors to buy energy stocks.