8 Ways to Play Energy Stocks in Risky Global Markets (Update 1)

Updated to reflect Stifel Nicolaus commentary on short squeeze energy stocks

NEW YORK (TheStreet) -- With the continuing threat of a euro zone collapse, new economic data that casts a shadow over the U.S. economic recovery -- Bill Clinton says we are already in a recession, Warren Buffett hems and haws and blames it all on Europe -- and the prospect that growth slows in China, energy stock investors have been put in a corner, or is it a good time to selectively add energy stocks?

On the one hand, energy stocks have been roiled by a recent drop in oil and gas prices near 2012 lows. Yet, it's a sector that had already been among the most beaten up in the equities universe before another onset of global macro panic. In particular, the natural gas heavy exploration and production companies are priced by the market with at least a hint, if not healthy dose, of bankruptcy risk. Natural gas has rebounded since hitting a decade-low below $2 earlier this year, and in fact, the natural gas spot market pricing has been one of the gainers in energy sector trading over the past few months.

Year-to-date, the S&P 500 energy sector is down more than 7%, versus an S&P 500 gain of just under 2%. The oil service stock sector is down close to 6%. Even among the "safe" dividend rich blue-chips, Exxon Mobil and Chevron have fallen 7% this year while GE has gained 4%.

Energy stocks have been the proverbial falling knife an investor doesn't want to try catching, but falling commodity prices may actually be an opportunity for stock investors in oil and gas giants and other companies whose earnings are tied to the sector. Here are some of the top energy stock ideas from Wall Street analysts:

1. Bank of America
Focus: the balance of risk in U.S. large cap energy names has shifted relative to weaker crude oil pricing.

Bank of America cut its oil price outlook on Wednesday as a result of global economic risks, but still offered some energy stock plays that may hold up amid continued economic deterioration and could contain value in an upturn.