Major Oils Flirt With New Highs As Oil Hits $86 (XOM, SLB, IYE, OIH)

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Oil crossed the $85.00 threshold today and then crossed the $86.00-mark.  On last look, black gold was trading at $86.04 per barrel, up $2.35 from Friday.

The reason is tied to Iraq, although not really the U.S. campaign there.  This is due to more tensions between Turkey and Iraq.  The Turkish government is apparently seeking parliamentary approval for a military operation against Kurdish rebels operating in northern Iraq.  MF Global also issued an alert today with the call that oil could see $100 per barrel by the end of 2007. Another analyst from Doha Bank has called for $100 oil in the coming months.  Xinhua recently had an article calling for $100 oil based upon Chinese oil imports rising.

We have even covered on our own how Dubai is going to get to end up owning much more than just a part of the NASDAQ if oil prices go over $90.00 like we think is easily possible.  Imagine that these high prices now are actually with no major net delivery miss here having happened.

Exxon Mobil (NYSE:XOM) is seeing shares up 1.3% at $94.70, less than 0.5% away from the $95.07 all-time high.  This has a large percentage of the iShares Dow Jones US Energy (NYSE:IYE) and this briefly hit a new high today.  Schlumberger (NYSE:SLB) is also up 1.3% at $111.25 today, and it briefly hit all-time highs this morning.  That stock is the largest in the Oil Services HOLDRs (AMEX:OIH), which are up 0.5% at $201.25 and also flirted with new highs today.

The Kurdish region is Turkey has been seeking independence from Turkey for most of the last century (and probably under regional control for far longer).  We will spare the diplomatic explanation because it is long and complicated, but in summary Turkey doesn’t want to give up the region and let it become independent AND it doesn’t want the Kurds in Iraq to become its own region because it would in theory give the Turkish Kurds a bit more of a leg to stand on. 

PetroChina (NYSE:PTR) has surpassed GE to be the second largest company by market cap.
T. Boone Pickens was still bullish with his last forecast, although he did not offer any formal price targets.
Recently Goldman Sachs issued a higher "Super-Spike" target noting oil could hit $135/barrel and $4.50/gallon.
Anadarko up over 2% after filing for its MLP to come public.
Valero rose recently even on an earnings warning.
Ken Heebner is still quite bullish on black gold as well.
Superior’s battered IPO is up 2% from our October 4 article, but something still doesn’t seem right there.

Jon C. Ogg
October 15, 2007

Jon Ogg produces the Special Situation Investing Newsletter for; he does not own securities in the companies he covers.  If you think oil mergers and spin-offs will continue, this is where you’ll get more proprietary data.