Credit Suisse's Top Energy Stock Picks for 2014

Source: Thinkstock While 2013 was a solid year for the energy sector, it could not keep pace with the overall blistering rise in the S&P. The energy team at Credit Suisse is positive on the year ahead, but they see some clear changes in the overall picture. The biggest one will be the overall volume of oil available. They are think that investing in energy may be volatile in 2014, but they see the top stocks in the sector going higher from current levels.

The Credit Suisse analysts have focused in on four important themes that may affect the energy sector in 2014. Their top stocks to buy reflect a close eye on these themes and the changing landscape in the world.

In 2014, oil markets may need to adjust to the wildcard of rising volumes out of Libya, Iran and Iraq. Any improvement in Middle East relations could up the ante in terms of supply. The U.S. service market is oversupplied at the low end, though high-tech providers can generate good terms. The top players should be able to remain on top. The majors are still one year away from a demonstrable payoff from their $250 billion investment programs. Big winners from 2013 are fully valued and investors may need to shift to other energy names. The analysts specifically mention the master limited partnerships and the refining stocks.

Here are the top energy stocks to buy from Credit Suisse for 2014.

Chevron Corp. (NYSE: CVX) is the only major domestic integrated on the Credit Suisse list. The company has benefited greatly in 2013 from record oil and natural gas production in the United States. The company may be looking to expand domestic production by acquiring one of the top exploration and production stocks. Investors are paid a solid 3.4% dividend. The Credit Suisse price target is $140. The Thomson/First Call estimate is $135. Chevron closed Thursday at $123.22.

Phillips 66 (NYSE: PSX) is a refiner that the Credit Suisse team is still very positive on. The Department of Defense declared this week that it granted a $292 million contract to Phillips 66 for aviation turbine fuel or jet fuel. Under this contract, Phillips 66 is to deliver jet fuel for 14 months, until April 30, 2015. According to the Pentagon, Phillips 66 knocked down 25 other firms for this job. Shareholders are paid a 2.2% dividend. The Credit Suisse price target for the stock is $80, and the consensus is at $79.50. Phillips 66 closed Thursday at $72.92.