Petroleo Brasileiro: Don't Believe The Hype

| About: Petrobras - (PBR)

Over the past several months we've seen crude oil climb from the mid to high $60 per barrel range to almost the $100 mark. So naturally, public companies involved in the petroleum arena are the direct beneficiaries of the trend. Petroleo Brasileiro S.A. (NYSE: PBR) has been one of those companies. With crude oil on the rise and the speculation of crude oil hitting $100 or much better in the coming months, companies such as Petro Brazil have hit the chord of investors.

The stock rose $24.03 to finally close at $116.77 in Thursday's trading session. Sure the company is buying some assets from Exxon South America and sure they are riding the upward oil trend, but the stock trading above $100 a share is not going to last in my opinion. Petro Brazil in the $85-$90 range is a little more realistic. Investors are just riding the trend but if something changes in the global markets as it relates to crude oil, even though we are heading into the winter months, companies such as Petro Brazil will feel some pain, Exxon Mobil (NYSE: XOM), Valero Energy (NYSE: VLO) and even Chevron Corp (NYSE: CVX) may be better bets than pouring more money into Petro Brazil in my opinion.

Disclosure: none