'Strong Buys' in the Energy Sector: S&P Analyst

Most oil companies are trading higher, helped by a surge in crude prices, according to Michael Kay, equity analyst at S&P.

“Chevron is one of the most oil-leveraged companies that we follow among the integrated—it’s close to 70 percent oil amongst production, compared to about 56 percent for Exxon,” Kay told CNBC.

Kay has “strong buy” ratings on both Chevron and ExxonMobil . He also has a $127 target price on Chevron.

“We think [Chevron] is the most attractive one in the group right now, mainly on valuation and on its oil leverage…and Exxon is right there as well,” he said.

Kay added that he expects the entire energy sector to benefit from growing natural gas demand.

Second Opinion on NatGas:

• Schork: NatGas Bears Out of Steam?

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More Market Intelligence:

• Oil Will Be Gone in 50 Years: HSBC
• Beware the Energy 'Panic Trade': Strategists
• $120 Oil: The Breaking Point for Consumers?

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CNBC Slideshows:

• Top Oil Producing Nations

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CNBC Data Pages:

• Dow 30 Stocks—In Real Time
• Oil, Gold, Natural Gas Prices Now
• Where's the US Dollar Today?

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Other Oil Giants:

ConocoPhillips

BP

Royal Dutch Shell

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Disclosures:

Kay does not own shares of CVX or XOM.

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Disclaimer