Energy: Integrated Oil 2008
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Energy: Integrated Oil 2008

After spending last year in third place, Neil McMahon of Sanford C. Bernstein & Co. climbs back to the top.


Neil McMahon

Neil McMahon Sanford C. Bernstein


Arjun Narayana Murti Goldman Sachs


Paul Sankey Deutsche


Paul Cheng Barclays ; Mark Flannery Credit Suisse

After spending last year in third place, Neil McMahon of Sanford C. Bernstein & Co. climbs back to the top. The London-­based analyst “does really in-depth research on areas others ­don’t look at,” says one client, citing ­McMahon’s studies of time-lapse satellite images to monitor Saudi Arabian oil production. Declining demand prompted the 39-year-old analyst to downgrade Houston-­based diversified giant Conoco­Phillips to sell in September 2007. One year later its shares had ­fallen 9.4 percent, compared with a 2.5 percent loss for the sector. Arjun Narayana Murti of Goldman, Sachs & Co. rises from ­runner-up to second. “He was the first analyst to correctly predict that the oil price would go to $100 — everyone else thought he was crazy,” recalls one grateful investor. Known more for his commodities price calls than individual stock picks, Murti published a report in September 2007 predicting that the price of oil, then at $60 a barrel, would surge to $150 a barrel, and in March predicted it would rise to $200 a barrel. Oil prices peaked at $147.27 in ­July before starting to slide and hovered around $100 a barrel in late September, but ­Murti remains bullish. Paul Sankey, who advances from ­runner-up to third, is “frank and outspoken, with a ­cynic’s eye for ridiculousness,” according to one ­money man­ager. In January the Deutsche Bank Securities analyst steered investors toward midsize oil companies such as New York’s Hess Corp. and Los ­­Angeles–based Occi­dental Petroleum Corp., on the belief that rising oil prices would have a greater impact on smaller companies. From Sankey’s upgrade through mid-­September, the stocks had outperformed the sector by 9.9 and 6.4 percentage points, ­respectively.

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