JJC:    Why is it that as the price of crude, crude oil has made its historic run from $100, which it first hit on February 19th, all the way to the $130s...  Why is it that major integrated oil companies have done next to nothing...  Think about this...  Exxon Mobil (XOM) is up 1%...  BP plc (BP), up 2.4%...   Marathon Oil Corp. (MRO), up 1.6%...  Even the better performers like Chevron (CVX), up 17%...  ConocoPhillips (COP), which has a lot of natural gas, up 18%...  Those do not come close to the 30% plus gain in the spot price of oil...  and this is what question I get asked, whether it be from my dad on Father's Day or the people on the street...  Why is it that on average the major integrated oils are up just 10% as the crude has gone from $100 to $136.42?... 

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I hear the chatter.  Some people are saying that the performance of these stocks is signaling a top in oil...  That's wrong...  I say what it's telling us is the truth, not the truth about the commodity, but the truth about these companies...  that these companies can not take advantage of the rise in oil prices...  that's right...  The big oil stocks can't make that much more money off of higher crude...  They did it to themselves...  Either because they didn't believe in higher prices, so they didn't drill enough, and took all the money and spent it on buying back stock instead of prospecting...  or, and this is more likely, they figured that it was 1980 all over again, the last time we got a big spike, when oil went all the way up, and then down...  They figured that oil would be back down to the $40-50 range by now, and they would've looked stupid...  it would have been too expensive to lock in high drilling rates...  day rates are up to $700,000 a day to borrow, lend and take a rig down...  I'm sure they thought it wasn't worth it.  It seems like they really did believe oil was going back down and it looks ridiculous in hindsight...  but that's because all these companies had, all the executives had, was hindsight. 

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So the people who are running the show, they remember the big disappointments of the past, they didn't have the foresight to realize that the future was different.  People who run these major companies, they were 25 years old back then...  they were the people, the young staffers, who recommended drilling in 1980 because they thought that $27 oil was going to $100 instead of $10, where it ended up.  Those people are now running these companies, and they're attitude is once burned, twice, not drilling.  And even if they had embraced the idea that oil was going higher, I still don't think that it would have mattered.  The big oil companies have signed so many contracts with foreign governments that have turned out not to be worth the paper they're printed on.  Who wants to invest in Exxon Mobil (XOM) when it's in Venezuela, and the government is happy to abrogate its contract or outright confiscate the assets...  Who wants to touch Shell, BP plc (BP) in Russia?...  I pick up the paper every day and it's like, hey they're kicking BP out of Russia any minute.  You can't do what these companies have done - invest billions and then write them off because the contracts you signed don't mean a darn thing.  Plus, incremental fields just don't mean that much to these behemoths.  In fact, they've been sellers of the incremental fields, not buyers. 

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But there are companies that can benefit from higher oil.   Companies that have been benefitting from the natural gas stocks, that are drilling like mad.  That cohort, natural gas, is up an average of 33.8%, in keeping with the crude price.  Crude is up around $33-34, oil is up from $100, now gas is up the same amount...  And as natural gas breaks out today, $13 bucks...  the stocks are heading even higher.  I want you to think XTO Energy Inc. (XTO*), which I own for my charitable trust, Anadarko Petroleum (APC), Chesapeake Energy Corp. (CHK), Apache Corp. (APA), Southwestern Energy Co. (SWN*) and El Paso (EP*), two others that I own...  I am heavy and have been heavy in natural gas for my trust, where I trade, open handedly, if you want to look at it...  All the wildcatters I talked about last week...  right?...  These companies are aggressively acquiring anchorage and drilling...  that's why they're going up...  These companies have more rig capacity to take advantage of higher prices, not so long ago there was a glut in North American land drilling, which has made it much cheaper for these companies to drill too...  So they're constantly on the move...  They are constantly adding assets...  They have been the performers, the real beneficiaries of higher oil prices...  And I have every reason to believe they will keep going higher.  We have been using $16 as the price target for natural gas, it's at $13...  it's still cheaper at $16 to burn natural gas than oil and cleaner, of course.  As I have said over and over on this show, I believe 2008 is the year of natural gas.  If you've only heard the show once or twice this year I think you now have heard that...  And when the futures broke through $13 per thousand cubic feet of natural gas today, I cheered.  Natural gas hasn't been this pricey since 2005, but that was a Katrina spike... 

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But this time I think it's going much higher... why?...  Do you know that historically there has been a 6-1 price ratio between natural gas and oil...  That means that with crude at $136...  do the arithmetic, it's just arithmetic, not math...  $23 for natural gas...  Too bullish for me... I'm staying with $16.  And here we have all these natural gas companies drilling like mad to produce more of this stuff, and we have had every one of them on this show, some repeatedly, and you've got to believe prices are going higher...  and therefore, their stocks are going higher.  You want a great indicator of natural gas prices...  look to Cramer-fave and friend of Mad Money, Aubrey McClendon, the CEO of Chesapeake Energy (CHK), $65, despite the market being down 100.  Aubrey's been a veracious buyer on the way up, but has always held his hand as natural gas prices have fallen.  See, on June 11th, Aubrey bought 11.9 million worth of CHK stock on open - market...  he's not lining his pockets with options like those old tech guys in Silicon Valley...  he's in there buying along with you...  How about this... did you know that he purchased 22 million dollars of stock on May 30th?  We have to figure that sees these prices and he's a believer...  He knows natural gas is going even higher...  He has always told us where it's going to go and he's been right.  Insiders sell for many reasons but you know they only buy for one, because they think their stock is going even higher.  When we followed Aubrey in the past he has made you boat loads of money and I say we stick with him and we stick with CHK, which is up 51% since oil broke through $100.  You're BP or XOM?... How about if you bought for CHK?...  How about if you still buy the CHK...  I think the rest of the natural gas cohort has a lot further to go and will follow Aubrey's 51%... 

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Now these natural gas stocks are likely to fluctuate with the oil futures, like they did yesterday, but as long as you wait a few days, I believe they stabilize, start the ramp again, like they did today...  Because they are levered both to asset growth, as they're buying more land and drilling more, and the price of rosined commodity?...  I call them twice-blessed, something we can't get enough of on Mad Money...  It's a continual theme of mine, finding stocks that are twice-blessed...  Now I know I recommend these names over and over and I don't care.  I'm trying to make you money.  I'm not going to start recommending bank stocks.  I recommend what I think is going to work for you.  I think these stocks outperform as well as another twice-blessed group that I have not been able to shut up about that I have recommended over and over and over again, and that's the fertilizer stocks.  Since October 31st of 2005, it's to toot my own horn, no.  It's to please follow what I recommend over and over and over and over on the show.  It's like when I worked on my hedge fund, over at Goldman Sachs...  What I recommend over and over, what I buy over and over is what I believe in.  Since 2005, I have favored Mel Gibson favorite, Mosaic (MOS), eight times,  Agrium (AGU), eight times, Potash (POT), six times...  These have been my most recommended stocks, like the natural gas name are now, and they have given you huge gains, POT is up 773% since October 31st of 2005...  the market has done nothing...  that's when I started praising it.  MOS is up 1,120% since 2005, AGU is the lagger, it's up a mere 419%...  why?...  worldwide famine and ethanol...  With more fertilizer being the secret to more output, even as it gets more expensive to use... Twice-blessed has worked... It's worked in fertilizer and I believe it will work in natural gas.  The integrated oils aren't even once-blessed, since they can't take advantage of higher prices. 

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