Readers of this space know that one of the preferred sectors has been the oil/oil services sector. Further, with oil now well above $110 per barrel, one may think that all of the affordable oil plays have been bid up. Indeed, most have, but not Chevron.

Chevron Corporation (NYSE: CVX) is the third-largest integrated oil company in the United States.

Chevron's organic reserve replacement, excluding Canadian oil sands, is sub-par, but just about every other dimension of CVX's operation rates good to strong.

Chevron's most attractive dimension? CVX has the equivalent of 'the facilities of significance' in an oil-challenged world, and especially in a gasoline-challenged United States: 22 fuel refineries, to go along with 2 asphalt plants, for a total refining capacity of 2.21 million barrels per day. Almost half of that fuel refining is based in the United States.

The significance? As noted, U.S. per capita gasoline consumption remains high -- despite record prices -- while refining capacity has not kept pace. That bodes very well for gasoline refiners, and Chevron is well-positioned to deliver the world's most sought after car fuel. The Reuters FY 2008/FY 2009 EPS consensus estimates for CVX are $10.72 to $10.60.

The risks? A breakthrough, readily-available, affordable alternative fuel, or a seismic U.S. public policy action would obviously hurt Chevron's results. But don't look for either of those realities to surface any time soon.

The First Call mean rating for CVX is: Hold [20 firms]. Mean 2008 target: $103 [high: $120, low: $55].

Stock Analysis: Chevron is moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from CVX's shares. Sell/Stop Loss if you were to purchase shares in this company: $71.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.