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Winter Weather Outlook

If you live in the Northeast or Midwest you’ve probably already reached for those heavy sweaters in the back of the closet. Baby it’s cold outside!

In fact there was a rare October snowfall near Baltimore while a deep chill has settled across much of Boston, New York and Philadelphia.

Yet oil and gas prices have barely budged. What gives?

Part of the reason is that there are huge surpluses of heating oil and nat gas and at this point, much of the stocking up has already been done.

“The good news here is that heating oil distributors and natural gas distributors for that matter, too, were building stocks this past summer when prices were at their lowest," says energy analyst Stephen Schork. "They're sitting on cheap inventory so you're not going to see a major spike in heating costs."

On top of record supplies, once the calendar actually does turn, NOAA is forecasting that the Midwest and northern states will likely get warmer weather than typical because its an El Nino year.

So what’s the trade?

Nat gas inventories are at historically high levels, reminds Joe Terranova. Nat gas is clearly challenged. I could only feel bullish if we had arctic temperatures.

If you want to take the other side of that trade and get long nat gas, I’d do it with BP, counsels Pete Najarian

Regardless of the weather, soy, wheat and corn prices have been moving higher, adds Tim Seymour. I’d play it with ag ETFs - either the DBA or the MOO .

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Trader disclosure: On Oct. 16th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (HGSI) Call Spread; Najarian Owns (XLF) Calls; Najarian Owns (YHOO) Call Spread; Najarian Owns (BAC); Najarian Owns (WFT) Calls; Grasso Owns (ASTM), (BAC), (C), (COST), (PRST), (V), (WMT), (FAZ), (XLF), (AAPL); Terranova Owns (SUN), (OIH), (HOC), (HES), (POT); Terranova Is Short (GRMN), (CCL)

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BP.
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DBA
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MON
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