It is the best of industries; it is the worst of industries.

And I think the energy position in your portfolio ought to reflect that U.S. oil stocks and natural gas stocks are headed in opposing directions. The underlying fundamentals of liquid hydrocarbons are so different from those of gaseous hydrocarbons in the U.S. market that the odds are that 2012 will bring higher share prices for U.S.-oriented oil producers and stagnant prices for U.S. natural gas producers.

And unfortunately for bottom fishers, I think the trends that have put natural gas in an energy deep freeze are set to last for a while.

This all has repercussions that extend well beyond the stocks of oil and gas producers because the conditions in these two energy sub-industries will have a huge effect on drilling and service companies and on chemical producers.

Here are two deals from Monday, January 23, that sum it all up. Read more

Next week it’s oil, oil and more oil earnings. To know where the industry is going, forget profits and look at capital spending

Exxon Mobile (XOM). Chevron (CVX). Royal Dutch Shell (RDS.A). BP (BP). ConocoPhillips (COP). Noble Energy (NBL) Apache (APA). Petro-Canada (PCZ). All these production companies report quarterly earnings next week.

Add in drilling equipment and oil service companies such as Smith International (SII), Oil States International (OIS) and National Oilwell Varco (NOV) and you’ve got quite a week for oil.

Move over technology, it’s time oil stocks get their fifteen minutes of fame. But what’s most important next week isn’t the topline earnings per share numbers that will grab the headlines. If you really want to see where the oil market and oil stocks are headed, concentrate on what these companies say about their capital spending plans for the rest of the year. That will tell you whether oil company CEOs think we’re seeing a real, sustainable economic recovery that will keep oil prices climbing or a temporary gusher that will dry up in a few months. Read more