Among Wall Street traders who focus on oil futures contracts, there is an eerie quiet. Crude oil prices had been in freefall for nearly a month, but have suddenly stabilized with West Texas Intermediate Crude, or WTI, hovering in the low $80’s. Does that mean the sell-off has ended and current prices are the “new normal?” A quick summary of Wall Street comments provides a range of opinions:

— BMO Securities: “We believe that crude oil prices could remain relatively weak over the balance of the year due to reduced appetite for risk, but forecast US$100/barrel long-run.”

— Merrill Lynch: “Global oil prices have already come down substantially and we expect a positive demand response coming into next year (pushing WTI back to $90).”

— Credit Suisse: oil will slide further into the upper $70’s.

— Citigroup: Unless an export ban is lifted, surging U.S. oil production means “WTI could fall to as low as $75.” These analysts also think that Iraq, Iran and Libya have the potential to sharply boost output in 2015, based on the outcome of current conflicts.

In other words, oil prices may soon rebound, stay range-bound or fall further. Nobody really knows. What we do know is what the various price points mean for exploration and production, or E&P, firms. And considering that such firms have seen their share prices fall sharply lower in recent months, buying opportunities have emerged, whether WTI is $70 or $90 in 2015.

To be sure, the price of oil will have a big impact on 2015 production plans. Goldman Sachs analysts believe that the fall to $80 oil will eventually lead to a cutback in spending and “material reductions in rig count and well count.” If oil prices fall to $70, then they predict that many older drilling rigs will be mothballed, while the pace of newly built modern rigs will slow greatly. Yet these analysts add that industry share prices already reflect $70 oil, and if oil remains above $80, then many E&P stocks look sharply undervalued.

But you can’t paint a broad brush with this group. That’s because some shale regions, such as the Permian Basin and the Eagle Ford region, are gushers, with fairly low production costs, while any firms drilling in the hard-to-tap Bakken shale, are much more vulnerable to falling oil prices. That includes companies such as Whiting Petroleum Corp. (NYSE: WLL) and Continental Resources, Inc. (NYSE: CLR).

Some companies were wise enough to prepare for an industry stress test, locking in higher prices for at least 70% of their projected 2015 oil output. These include Range Resources Corp. (NYSE: RRC), EV Energy Partners LP (Nasdaq: EVEP) and SandRidge Energy, Inc. (NYSE: SD). The fact that these stocks have slid sharply in tandem with other unhedged E&P stocks tells you that this sell-off has been indiscriminate.

Analysts at Merrill Lynch examined the potential upside and downside for various E&P firms at $70 oil and believe that solid upside for some stocks remains, even if oil prices fall to that level. Merrill’s analysts suggest investors give a fresh look at Devon Energy Corp (NYSE: DVN). “Prior to the pullback in oil, we believe the market already was not attributing sufficient value to its MLP and oil sands projects. Given an even larger disconnect now, we believe this is one name that may outperform peers in a sector rebound.” Their $102 price target represents 70% upside. John Bethancourt, a director at Devon, is also positioning for upside, having recently bought $500,000 in stock on the open market.

#-ad_banner-#Of course investors can always focus on the other side of E&P’s operations: natural gas. That commodity has been among the most disappointing of the energy industry in the past few years, creating far fewer profits than an equivalent amount of crude oil. The slump in crude oil, relative to natural gas, may start to change that thinking. Meanwhile, the gas-focused E&Ps have been hit equally as hard in recent weeks and months, even those firms with a history of solidly-profitable gas operations. Southwestern Energy Co. (NYSE: SWN), which recently acquired more than $5 billion in shale assets from Chesapeake Energy Corp. (NYSE: CHK), lost more than 30% of its value in the past six months and now trades at its lowest level in two years.

Risks to Consider: Although a number of stocks now appear to be pricing in $70 oil, they still may fall further in value if crude oil moves to that mark, as investors come to fear an even deeper rout for crude oil.

Action to Take –> The oil price outlook is bifurcated. In the near-term, we may see further weakness, at least until OPEC relents and cuts output. But over the mid and long-term, crude oil priced at less than $80 sets the stage for weak economics in various energy fields. The eventual reduction in drilling activity helps promote an oil price rebound, which most E&P stocks are not yet accounting for. Still, it’s wise to stick with defensive names such as Devon Energy and Range Resources for now and build stakes in risker E&P stocks as it becomes more apparent that oil prices have truly stabilized.

If oil, natural resources or commodities are what interests you, look no further than StreetAuthority’s Scarcity & Real Wealth. Our resident natural resources expert Dave Forest has more than a decade’s experience as a trained geologist and analyst. His industry insight allows him to read the markets and provide the most timely, potentially lucrative advice for everything from oil and gold to molybdenum. To gain access to Dave’s latest research, click here.