We’ve seen a huge run in crude oil. We started at $150, dropped to $30, and now it’s over $100 again. Where are we going with energy and crude oil?
I think we’re going to see pretty high energy prices on average all year, probably around this level—the 90s, low 100s. I do think it’s very possible we’ll see a spike increase to as high as $120 a barrel at some point this year.

But haven’t we seen the demand on the user side decline? People have really changed driving habits.
Well, it’s interesting. That was certainly the case back in 2008, when we saw that spike in crude oil prices up to $150 a barrel.

$4 a gallon at the pump.
Absolutely. You saw people switch away from SUVs and trucks—especially in the United States and other developed countries—toward smaller cars.

We actually have seen pretty strong truck sales here in recent months, which suggests that maybe consumers have become accustomed to higher energy prices, and maybe we won’t see as much of a price sensitivity and demand this time around.

Certainly we saw Super Bowl ads dominated by cars…so is the automobile industry back?
It certainly recovered a lot off the lows. We’re not back to where we were back in 2004/2005.

Arguably, I think that was inflated by the credit bubble—you could pretty much finance a car if you had a pulse, but nowadays it’s a lot harder.

We’re still at $12 million annualized sales, up from $9.5 million at the lows. Not back up to that $16, $17, and $18 million annualized sales, but certainly very strong.

Look at China. China is now the world’s largest automobile market. That’s a big shift. The US held that title for over a century, so that’s been a major shift in the last couple of years.

What advice would you give to people looking at the energy market?
I think it’s going to be a real sweet spot for the oil-services names in particular this year.

What we’re seeing is that at first, when crude oil prices rose off their lows, oil companies were a little hesitant to go out and spend big. Now we’re seeing those budgets really ramp up, and I think this year is going to be the year that you see a lot of exploration and development spending.

Companies like Schlumberger (SLB). Weatherford (WFT) is another one I like a lot. Weatherford is interesting as well, because it doesn’t have quite as much exposure to fracturing as a service in the United States—meaning it has a little less natural-gas exposure in the United States, which I think is pretty good this time around.