So much for oil plummeting to $30 per barrel on a supply glut. The price of oil, the world's most vital commodity, is currently largely divorced from supply/demand fundamentals, and that's one reason I'm reiterating my buy rating for oil/natural gas company Anadarko Petroleum Corp. (APC), first recommended on May 14, 2009. at a price of $43.55. If you bought APC in May, you're up about 45%.

Look for APC to post a 2% to 4% production increase in FY2009, followed by a 4% to 5% rise in FY2010. Further, institutional investors are looking past this year's likely bottom-line loss, and toward better quarters in FY2010 -- which is a major reason Anadarko's stock is up substantially since May.

Offshore oil servicer Hornbeck Offshore (NYSE: HOS), first recommended on May 28, 2009 at a price of $27.08, twice within the past 60 days broke below the key, 50-day moving average.

Historically, that would be enough to re-evaluate the investment, but the stock did the re-valuation work on its own, recovering to the $27.08 entry point this month.

There are analysts and oil gurus who argue that $30 per barrel oil is possible if the U.S./global economic recoveries stall.

$30 oil? Don't count on it, which is why I'm Reiterating my Buy rating for Anadarko Petroleum Corp. (NYSE: APC), first recommended on May 14, 2009 at a price of $43.55.

It's a difficult call, but I'm Reiterating my Buy rating for Marathon Oil (NYSE: MRO), first recommended on April 20, 2009 at a price of $28.55.

Marathon's stock has meandered, largely due to reduced demand for Marathon's heavy/sour crude -- a negative trend that's likely to continue through at least mid-Q3.

"National Oilwell Varco (NYSE: NOV), a buy in our 'Wildcatters portfolio,' will see an outsized benefit from improving conditions in the global oil market," says Elliott Gue in The Energy Strategist.

"Rig technology is the crown jewel of National Oilwell's business; the unit builds key equipment used on land and offshore drilling rigs.

"The unit is currently benefiting from the boom in deepwater drilling activity -- one of the only drilling markets that continue to see growth.

"Equipment used on deepwater drilling rigs is far more complex and expensive than that used on land or shallow-water rigs. As a result, selling equipment into the deepwater market carries far higher profit margins for National.

It goes without saying, that the oil/oil services sectors are preferred here. Look for oil to remain a major fuel for propulsion for at least three more decades, even with alternative energy source development. And with the aforementioned in mind, Occidental Petroleum (NYSE: OXY) is worth a review.

Occidental Petroleum engages in oil/gas exploration and also makes basic chemicals, plastics, and petrochemicals. The company has proved reserves of 3 billion barrels of oil equivalent in three regions: U.S./North America, Middle East, and Latin America.

"Many experts believe that oil prices are at unsustainably low prices now, and they expect a sharp rise in the commodity price as supply and demand come back into line again," says turnaround expert George Putnam.

In The Turnaround Letter, he suggests, "If oil does begin to rise again, the oilfield service stocks could rebound sharply." Here, he takes a look at large cap plays on a rebound within the oilfield services sector.

"We all know that oil prices have fallen dramatically from their highs in the summer of 2008. But different types of oil-related stocks have reacted quite differently to the price change in the underlying commodity.

"For example, while oil itself has dropped nearly 70% from its 12-month high, the stock of the largest integrated oil company, Exxon-Mobil (NYSE: XOM), is down only 26%, less than the stock market as a whole.

In his Validea newsletter, John Reese selects stocks using the investment strategies of the market's leading gurus, such as Benjamin Graham, John Neff, Warren Buffett, David Dreman, and Peter Lynch.

The advisor, and author of the just-published The Guru Investor, recently ran a screen based on the investment strategy of Kenneth Fisher to find his latest buy recommendation -- Kennametal (NYSE: KMT).

Reese explains, "For decades, the price-to-earnings ratio has been the most widely used valuation measure for stock investors, and a key tool in the arsenals of many of the gurus I follow. ut in 1984, Kenneth Fisher sent a shockwave through the P/E-conscious investment world.

"One of the 'super five' integrated oil and gas companies, Royal Dutch Shell (NYSE: RDS.A) has a diversified portfolio of oil and gas assets around the globe," says international investing expert Nick Lanyi.

In High Yield International, he says, "As one of the more conservative plays on a falling dollar and a rebound in oil & gas prices, I am adding Royal Dutch Shell -- yielding of 5.8% -- to our 'Reliable Income' portfolio."

"The Amsterdam-based company's revenue is more gas-oriented than its other super-major peers; about 40% of production is natural gas.

"In addition, Shell is more focused on unconventional sources of oil and gas than most -- the company plans to derive more than 10% of its revenue from sources such as oil sands and liquefied natural gas by 2014. This coincides with Shell's long-standing reputation as an industry leader in technology and engineering.

Investors thinking about positioning themselves in oil stocks, or in other stocks that would benefit from higher oil prices may want to wait awhile.

Global oil demand -- a major factor in determining oil's price -- is expected to decline in 2009 by 1 million barrels per day (bpd), the International Energy Agency announced Friday in its latest monthly report.

Even more significant, the IEA also decreased its 2008 global oil demand estimate by 70,000 bpd to 85.8 million bpd, a reduction which means oil demand dropped 0.3% in 2008 and is forecast to decline 0.6% in 2009 -- the first 2-year decline in global oil demand in 26 years, or since 1982-1983.

Oil fell 13 cents on Friday at mid-day to $35.24 per barrel. Oil has fallen an astounding $112.03 since hitting a record high of $147.27 per barrel in the summer of 2008.

For those that had the fortitude to pull the trigger, shorting crude back in early July when all the perfect storm conditions for $200 per barrel oil were on the horizon ... and had the stones to stay with that trade ... made a killing.

This is one of the greatest reversals for any major market of any kind that has ever occurred. And it clearly shows how the crude oil market was being manipulated by speculators and hedge funds.

The impact was fatal for hundreds of small airlines and small- to medium-sized trucking companies, along with thousands of other companies that didn't hedge against the price explosion in energy.

The price of crude, which topped out at $147 per barrel in July 2008, crashed to $35 per barrel by Dec. 18 -- a 76% haircut -- before getting a bid that got the price back above $40 on the eye-popping headline that OPEC would slash daily production by 4.2 million barrels.

I've been following the election closely for two years. For the most part, politics is a hobby of mine, but in this year's election my interest went much deeper.

I recognized very early that the 2008 vote would be monumental on so many levels and investment opportunities would abound. I even outlined the impact of the policies of each candidate on the market in an election gallery.

Now that the results are in with the Democrats taking significant control of the executive and legislative branches, I want to drill down and explore one investment idea that I believe will ascend above all the rest.

One common theme with all Democrats is that spending is sure to increase. Democrats are firmly in the Keynesian camp of using government spending to solve economic problems. We will see large government expenditures in the short term from the new administration.

Can anyone say "inflation"?

So much of the market is focused on deflation with current valuations based on the expectation of deflating prices. While it's true that the economy is slowing, I am more concerned about inflation.

Now, with a Democrat in the White House, I am convinced that the way to make money in the market is to bet on inflation. Vast sums of dollars will be printed and distributed into the economy to stabilize it. Doing so will weaken the U.S. dollar, increase interest rates and create inflationary conditions.

Front and center with inflation will be two commodity trades: gold and oil. I am not a believer in gold, so I'll stick to the oil trade. If you want to make money in the early stages of the new administration, I suggest you position your portfolio to profit from higher oil prices. That means owning oil stocks, and there are several names to consider:

"We sense a turn for the better coming in the oil sector," says Peter Way who tracks 'big money' investors for his Block Trader Oil & Gas Report. Here's his look at the "big block" traders.

"When we use the hedging analysis employed in our stock price forecasts, there are significant differences between some adjacent futures expirations. Here's the current picture:

"Front month (November) hedging suggests likely near-term higher prices. But the December contracts are likely to continue the past 3-month price decline – briefly.

"After that we could see crude rise over a few months into the $115-125 area or even higher, providing a bullish backdrop for most energy stocks. We sense a turn for the better coming in this sector.

"Several issues are selling at attractive prices now. Among major integrated producers, the standout prospect among the big oils is Petrochina (NYSE: PTR).

"Prices for energy stocks, including the drillers, are bombed-out and should be aggressively accumulated now," says resource expert Eric Roseman.

Here, the editor of The Commodity Trend Alert explains, "The absolute worst thing we can do is sell now." Here's his outlook on energy and drilling and a trio of buys.

"The pain felt by commodity bulls should abate shortly; this mind-blowing expansion of credit will ultimately fuel inflation to much higher levels. Eventually, long-term interest rates will rise sharply in the United States as the government grows hungrier to finance its out-of-control spending habits.

"What we're seeing now is a market that has gone from being obsessed with inflation just two months ago to one now worried about rapid deflation or an environment of declining prices. Combined with bad economic news overseas, the U.S. dollar has seen a violent reversal exacerbating the plunge in raw materials. It's been a brutal sell-off and the worst decline I've seen since mid-2006.

"We are moving headlong into oil," notes John Reese, who analyzes stocks based on the criteria used by "legendary" investors such as Buffett, Graham and Lynch.

In his Validea newsletter, he says, "My fundamental models indicate that the oil industry is where the best values in the market are." Here's a look at W&T Offshore (NYSE: WTI), which is based on the criteria used by contrarian David Dreman.

"The economy and stock market have gone through a legitimate crisis because of the credit woes, and it takes time for something like that to work itself out.

"But the important thing to remember is that we've been through financial crises before -- even bad-debt financial crises like this one -- and the market has always stabilized and then pushed higher.

"And history has shown that those who can stick with the stock market through down times like these will be rewarded.

"David Dreman -- one of the gurus I base my strategies on -- notes in his recent Forbes column, 'If you pack up now, chances are you'll miss a good part of the next bull market. A large part of the gains are always made in the first few months of one, when market-timing investors are still on the sidelines.'