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With Oil Rebounding, This Is Stock to Buy

The oil industry is ramping up again, Cramer said Wednesday. That’s because China, too, is ramping up, and its improving economy – like all growing economies – requires oil, which is why crude hit a three-week high on Tuesday.

“So we have to make an increased bet on increased demand for black gold,” Cramer said, “a bet on the oil-service outfits that help oil companies get stuff out of the ground.”

His favorite right now is Weatherford International, whose share price has climbed 19% since Chairman, CEO and President Bernard Duroc-Danner last appeared on the show back on June 8. The fourth-largest oil-service name in the business had suffered a string of disappointing quarters but rectified the situation on Tuesday, delivering a 4-cent earnings beat, a 22% jump in year-over-year revenues and a margin expansion to 400 basis points from 175.

Business was up across the board, both in North America and abroad. And it’s this international business that Cramer likes so much. Weatherford has a presence in Iraq, Brazil, Russia, Algeria and countries in Asia, making it the perfect fit for this environment where 75% of the capital spending from exploration and production companies will be in overseas markets. That number could shoot even higher given the reaction to BP’s Gulf of Mexico spill, which cost the company only a penny per share off its earnings thanks to its overseas focus.

“It’s the anti-Gulf of Mexico oil-service company,” Cramer said.

Still, though, WFT trades at a 25% to 30% discount to its competitors, largely because of those disappointing quarters. But they were a result of Weatherford refusing to downsize its international operations during the recession, a move that puts them far ahead of competitors now that things are turning up.

Plus, there is at least one other sign of a drilling recovery than Weatherford: Halliburton said much the same when it reported on Monday.

“So I know the group's in bull-market mode,” Cramer said, “with Weatherford ready to accelerate into the second half” of the year.

He recommended buying WFT ahead of Schlumberger’s earnings report on Friday, on the idea that some good numbers from SLB should generate some pin action for Weatherford.

When this story published, Cramer’s charitable trust owned Weatherford International.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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