We are going to sell 2 of our oil stocks in the IA portfolio. The first is Exxon (XOM $62.09), and the second is Conoco (COP $65.63).

Exxon has clearly been the laggard of the group, and unless I am very wrong, they will never be a buyout target for anyone.

Conoco, has traded in a fairly tight range (buy under $60, sell above $65). During periods of extreme optimism, the stock occasionally pops above $70.

Our cost basis on Exxon is $59.73 (bought 2-8-06), and Conoco $59.73 (bought 2-8-06). I like the idea of using both of these companies as trading vehicles, but only during times of extreme weakness in the sector.

If the fed decides it isn't finished with its tightening cycle, fears of the economy slowing may temporarily curb oil demand. In the U.S., higher prices have a way of doing that on their own.

Lightening up in the oil sector will not hurt our exposure since we still own MRO, CHK, SUN, SLB and VLO.