Mad Money

Cramer: Oil’s Volatility Is Good for Nat Gas

Don’t blame a blast of frigid temperatures in the Northeast for oil’s bump in price on Monday, Cramer said. The contango trade is driving crude right now.

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Traders are using contango – in this case, the practice of buying oil and storing it for future sale at higher prices – to manipulate prices right now, Cramer said. As a result, the commodity’s cost has been separated from the underlying fundamentals. But crude’s recent price swings could hold at least one benefit.

“I think it’s very bullish for natural gas,” Cramer said, adding that while oil was once the more stable fossil fuel, the distinction has since gone to nat gas.

Natural gas’ growing importance, especially in the US, is the main catalyst behind Exxon Mobil’s purchase of XTO Energy and Total’s announcement on Monday that it would buy 25% of Chesapeake Energy’s Barnett Shale assets, Cramer said. He sees more deals to come, most likely from Royal Dutch Shell .

The Mad Money host also endorsed Range Resources and EQT for their exposure to another nat-gas shale, the Marcellus in Pennsylvania.

Finally, 2010 will be big for Boeing , Cramer said, “period, end of story.” He predicted that aerospace will be one sector that drives the American economy this year, and the company also should benefit from its much-delayed 787 Dreamliner, which has finally taken flight.

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