The oil stock play has been hot on Wall Street, but is it waning?

Yesterday it was Gulf, Shell, Phillips. Today it's Arco and Unocal. What oil company will be hot tomorrow? Answer that question and you'll be king-for-a-day on Wall Street.

But it's getting to be a harder and harder question to answer. Although oil stocks have been hot, Wall Street is running low on new oil takeover candidates, and figuring out where the next hot oil stocks are hiding is a complex business.

The oils have been popular due to one of the most dramatic corporate developments in recent years: The giants of the United States oil industry, once so globe-girdling and wealthy, have been shrinking, consolidating, merging, spinning off assets, buying back stock.

As a result, investors prescient enough to have acquired shares of oil companies -- or faithful enough to have held them through years of sluggish performance -- are being rewarded handsomely.

Those stocks did well in the 1970s, you may remember, because the price of oil looked as if it were climbing to the clouds. Reserves sitting safely in underground oil fields doubled and redoubled in value. The companies themselves used their prosperity to expand operations, setting up new refineries and gas stations, boosting exploration, developing alternative energy programs, even getting into non-energy businesses such as retailing and financial services.

Those days are over. There's plenty of oil in the world, and industry analysts say it will be the 1990s, at the earliest, before demand begins to pick up. Underground reserves have slipped in value, and more deflation of oil prices could occur before the '90s.

T. Boone Pickens Jr., the Texas oilman and financier who has campaigned long for the restructuring of the oil industry and who pioneered the ``royalty trust'' concept of spinning off oil assets to stockholders, contends that the US oil industry is actually in ``liquidation.'' He counsels that oil companies slim down and enhance the value of their stock rather than maintain ponderous operations.

Mr. Pickens is no longer a voice in the wilderness. He has trumpeted that message so successfully that a number of oil companies -- most recently Atlantic Richfield and Mobil -- have begun restructuring on their own.

Arco recently announced it was dropping out of the refining and marketing of petroleum products in the District of Columbia and 12 states east of the Mississippi River. In addition to its service stations, it is also selling its refinery in Philadelphia.

Mobil announced it will shed Montgomery Ward & Co., which was bought nine years ago during the heydey of windfall profits in the oil industry. But Mobil officials say it will be two or three years before Montgomery Ward is a strong enough division to stand on its own and indicate there are no big restructuring plans for the oil company other than the Ward divestiture.

Still, all this moving and shaking -- and especially all the debt many of these companies acquire in the process -- has some people worried. Sanford Margoshes, an oil industry analyst for Shearson Lehman Brothers, thinks that if the price of oil falls to $20 a barrel or below, these companies are going to have big problems.

``The debt-for-equity substitution,'' Mr. Margoshes says, ``weakens these companies in terms of coping with crude-oil price uncertainties and weakens American industry.''

He notes that while oil prices were firmer early this year, since the beginning of April they have fallen sharply. The weighted average for a barrel of refined product dropped from $29.90 to $27.87 in the past five weeks. Arab light on the spot market fell from $27.75 to $27 in the same period.

The oil-stock play on Wall Street has ``mesmerized people into forgetting the fundamental economics of the oil business,'' he says. The fundamental fact is that oil prices are weak and could get weaker.

Margoshes sees prices deteriorating over the next few months, stabilizing by winter, but then sliding to even lower levels in early 1986 because of economic slowdown.

Nevertheless, in what has been a steady-as-she-goes stock market, the oils have been followed enthusiastically. (The Dow improved markedly late last week and closed Friday at 1,274.18, up 26.94 points for the week).

It takes a sharp eye to do follow the oils, warns Kurt Wulff, an industry analyst with Donaldson, Lufkin & Jenrette. And there may be fewer to follow, too, say other analysts.

The key is to find a company that looks so much below the value of others that it will eventually attract the attention of takeover specialists such as Pickens -- ``a candidate for future action,'' as Mr. Wulff describes it.

Certain companies are widely mentioned today -- although the very act of mentioning them has made them less attractive as investments. Among them: Amerada Hess, Sun, Kerr-McGee -- all of which have passed stringent anti-takeover measures in recent days -- as well as Standard Oil of Ohio, Amoco, and Pennzoil.

Mr. Margoshes, however, thinks the hunt for new oil takeover candidates has peaked -- ``essentially because they're running out of viable candidates. They [takeovers, stock buy-backs, etc.] remain a possibility, but there's really a serious question whether any other firms will be doing anything like Arco.''

Oppenheimer & Co. analyst William D. Hyler agrees, seeing only Amoco as having the cash flow to ``do creative things.''

The price of smaller companies such as Sun is already fairly high in relation to earnings, and Amerada Hess is rather leveraged.

The stock prices of many oil companies are ``up on restructuring hopes, not on prices, and therefore will eventually come down.''

If oil prices slip, ``the more leveraged companies are in danger,'' Mr. Hyler says. Unocal and Phillips have high debt relative to equity and have a more meager cash flow.

Chevron (which acquired Gulf), Texaco (which acquired Getty last year), and Mobil (which acquired Superior) have more debt, but they also have greater cash flow, since they have increased their asset base. That puts them in a little stronger position in the event of another slip in the price of crude.

Arco, more than most oil companies, is ``calling the shots'' with its divestiture and stock buy-back program, Hyler notes. If oil prices fall to critical levels, it can halt the buy-back.

``But there aren't many Arcos out there,'' Mr. Hyler says.

The message of Hyler and Margoshes: The Wall Street play in oil company takeovers has just about played itself out. Chart: Interest rates. Source: Bank of Boston.

Percent Prime rate 10.50 Discount rate 8.00 Federal funds 8.06 3-Mo. Treasury bills 7.73 6-Mo. Treasury bills 7.87 7-Yr. Treasury notes 10.90 30-Yr. Treasury bonds 11.22