Global macroeconomic forces continue to drive prices for energy commodities and related stocks. Institutional investors are pulling back from all forms of risk; the only asset classes that have shown any signs of strength of late are Treasury bonds and, to a lesser extent, gold. Stock-specific factors aren’t driving this selloff.

My basic thesis, outlined at length in last week’s issue, remains that concerns about the EU debt crisis are vastly overblown.

Despite all the negative headlines, the TED Spread, a measure of health in the interbank lending market, still stands at less than 38 basis points. That’s well up from the lows of 10 to 15 basis points reached in April but remains significantly lower than the 55 basis-point reading of a year ago and the 400-plus basis-point readings at the height of the financial crisis. To say that credit markets are “frozen” is an extreme exaggeration.

A bit closer to home, Proven Reserves bellwether Enterprise Products Partners LP (NYSE: EPD) priced a series of three bond offerings with a total face value of $2 billion on May 20. Based on the spread over equivalent Treasuries, Enterprise is paying significantly less for these bonds than for an issue it priced last October. That’s hardly a sign of a credit market in dire straits.

The issue of The Energy Letter due out later today offers a detailed look at crude oil prices. The basic conclusion: The recent selloff of $20 a barrel isn’t unusual–crude suffered several similar retrenchments between 1998 and 2008 on its way to 13-fold gains.

And US oil demand is bouncing back, and tanker loadings in the Middle East suggest that Chinese demand remains strong.

I also don’t expect a temporary dip in oil prices to $70 a barrel to derail major international exploration and development plans. The turn in the oil services cycle I outlined in the April 21 issue First-Quarter Recap remains valid.

Global equity markets and oil prices are bouncing back from Tuesday’s intraday lows. Strains in the credit markets also appear to be easing. Credit default swaps (CDS) covering Italian, Spanish and Portuguese government bonds have declined from elevated levels earlier this week. Given the signs of severe panic witnessed over the past few days, this oversold bounce could continue for some time.

Technicians would say that the S&P 500 successfully retested its February 2010 low on Tuesday. This may well have marked the low for the year, though no one can tell you with certainty that crude oil and global stock markets won’t retest recent lows between now and autumn.

But the bottom line remains that the recent selloff is likely a correction within a cyclical bull market. My worst-case scenario is that oil retests its July 2009 lows just under $60 a barrel, and I continue to expect oil to reach $100 a barrel by year-end–we’re a lot closer to the bottom of this range than the top.

My strategy is to look to add more long-side exposure in coming months to play the upside. If we get a quick rally from current levels, I may also recommend a few hedges to offset the risk that the market sees another bout of selling in the summer or early autumn.

In volatile markets, it’s not uncommon for our recommended stops to be hit. Four companies touched our stops over the past few days: Noble Corp (NYSE: NE), Petrobras (NYSE: PBR-A), Nabors Industries (NYSE: NBR) and Valero Energy Corp (NYSE: VLO).

Noble Corp is a contract driller that owns a mixture of deepwater floater rigs and shallow-water jackups. In addition to general market selling, the stock has been hit by the idea that the US moratorium on new offshore oil-drilling permits in the Gulf of Mexico would reduce demand for rigs.

A report on the Horizon incident is due out this week, and I wouldn’t be surprised to see the ban on new deepwater drilling permits extended for another month or so. However, it also appears the Obama Administration is close to lifting the ban on shallow-water drilling activity.

The reaction in Noble’s stock is overdone, unless the ban on new offshore permits extends well into 2011–an unlikely event. Nonetheless, as I noted in the last issue of The Energy Strategist, I prefer Seadrill (NYSE: SDRL) thanks to its high dividend yield, low exposure to the Gulf of Mexico and new fleet of rigs. For now I recommend standing aside from Noble Corp; I will look to jump back in as we get more clarity on the drilling permit moratorium in the Gulf of Mexico.

Wildcatters Portfolio holding Petrobras is the Brazilian national oil company. The stock has been hit hard for three reasons: broader market selling, high volatility in the Brazilian market and the oil for shares program.

The first two rationales are temporary in nature, and extreme bouts of panicky selling have historically marked outstanding entry points for Petrobras. Certainly, the company’s exposure to some of the world’s most exciting deepwater fields remains just as compelling an investment proposition as it was one month ago.

The final rationale for the selloff in Petrobras makes little sense. It’s true that Petrobras will be issuing a large amount of stock to raise capital and help fund the development of its many recent oil and gas discoveries. In the short run, issuing new stock dilutes the value of shareholders’ existing stake in the business.

But the key point is that Petrobras is using the capital to grow its business, boost production and fund new exploration; in effect, the earnings pie is growing. As part of the deal, Petrobras will also be getting additional oil rights to explore and produce new regions offshore Brazil. If you were stopped out, Petrobras A shares rate a buy under 37 with no stop.

Nabors Industries is a contract driller specializing in land rigs. As I explained in the April 28 issue of The Energy Letter, Why Some Gas is Worth $7.28, US drilling activity has held up because of higher prices for natural gas liquids (NGL).

It’s also worth noting that while natural gas prices remain depressed, they’ve held steady during the recent downturn–a sign that gas remains unloved by institutional investors. Gas isn’t suffering the selling of other asset classes because it isn’t as widely owned. Nabors remains a strong buy under 28, though I’m suspending the stop due to ongoing volatility in the sector.

Refiner Valero Energy Corp is a trade on a seasonal rebound in refining margins, a trend I discussed at length in the February 17 issue A New Dark Age for Refiners. The trade was working our well–refining margins spiked and Valero’s share price followed suit–but the broader market has dragged the stock down.

That being said, refiners have outperformed of late for two reasons: They’re under-owned by institutions, and there are ongoing signs that US demand for oil is recovering. I’ll offer more details on the latter point in today’s issue of The Energy Letter.

Valero Energy Corp rates a buy under 20, with a stop at 14.95 to provide some downside protection; I expect the stock to rally into the mid-20s late this summer. This should be considered an aggressive, shorter-term trade.