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There is a bull market in oil and gas thanks to recent mergers

There's a bull market in the oil and gas cohort, says Jim Cramer

CNBC’s Jim Cramer on Monday said he sees a bull market in oil and gas. He said oil stocks are increasing in value thanks to two major oil company mergers as well as the rising price of crude.

“I’d argue that there’s always a bull market somewhere and right now it’s in the oil and gas cohort group,” Cramer said.

Chevron announced Monday it would buy Hess in a deal worth $53 billion. The merger comes just weeks after Exxon Mobil agreed to buy rival Pioneer Natural Resources in a $59.5 billion deal earlier in October.

These recent mergers reminded Cramer of oil takeovers in the early 1980s, when he said major companies realized “it was cheaper to drill for oil on Wall Street than in the ground.” To Cramer, Chevron can use its large budget to make deals that increase earnings almost immediately.

He highlighted Coterra, which he said is worth much more than it’s currently trading for, as well as Conoco.

“Wall Street’s slow to recognize this new trend, though; it seems stuck in a world where oil has an expiration date because of ESG concerns and electric vehicle sales,” Cramer said. “The oil companies no longer believe that short termination theory, though. Still, one more reason to stay invested in these stocks.”

It's a good time to own oil, says Jim Cramer

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Coterra.

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