Buy the Correction with These Energy Stocks: Goldman

Energy stocks are oversold and now is the time to jump in, Goldman Sachs analysts wrote in a research note on Friday.

A rebound in the fourth quarter will be due to better-than-expected demand for oil in China after the Olympics, improved demand in the U.S. because of the decrease in prices and a need to restores low inventories, the analysts said.

Most of Goldman's top 10 list of favorite energy stocks are from outside the United States, especially from emerging economies. They are: Cairn India, China National Offshore Oil Corporation (CNOOC), Russian Gazprom, Brazilian Petrobras , Spain's Repsol , and Canadian Suncor Energy .

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Oklahoma City-based independent oil and gas producer Devon Energy , integrated energy company Hess, with headquarters in New York, oilfield services giant Schlumberger and offshore drilling contractor Transocean are the U.S. companies on the Goldman Sachs list of favorites.