Global economic growth is accelerating after two slow years. Commodity prices are shooting up. Time to buy a commodity producer? Maybe not. You could do better buying a supplier to a commodity producer. We have in mind oil service companies. On the surface this looks like a good time to be in the oil business. ExxonMobil just reported a very strong quarter, for instance. But that doesn't mean integrated energy companies are likely to outperform the market in the coming months, warns William Rhodes, a strategist who runs his own firm in Boston. He sees barrels of oil sloshing over the market as producing countries, including Iran, Libya, Nigeria, Saudi Arabia and Venezuela, open the pump valves to keep cash flowing into their economies. Add to that the return of Iraqi oil to the market (volume and timing uncertain though it is), and you get plenty of supply to keep prices flat or falling.
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