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Gartman: Deep-Water Ban Won't Send Oil Prices Soaring

Monday, 7 Jun 2010 | 5:44 PM ET

You know the spill in the gulf will have a big impact on the environment. But will it have a huge impact on your wallet?

According to new research from Sanford Bernstein if other nations were also to ban deep-water drilling as we have - and that ban were to be extended for one year – it would cut 500,000 barrels a day from supply by 2013.

Think that sounds a tad dramatic? Thinks it's an over-reaction?

Energy investors are already betting on these kinds of developments.

Fast Money host Melissa Lee says her sources are suggesting that oil could go to $101 this year.

Should you also bet on a sharp move higher in the price of oil?

Not according to esteemed commodity trader Dennis Gartman – at least not in the near term.

Beyond BP: Long-Term Outlook for Oil
The Fast Money traders share their oil outlooks.

He says estimates that oil may be going to $101 are laughable.

The market is in a huge contango and there’s more than enough crude above ground. It's moving into storage. It's moving into tankers, Gartman tells the desk.

Deferred futures are going up but that's an arbitrage game and has nothing to do with price action, he adds.

Money manager typically like exposure to energy, reminds Joe Terranova, but I don't expect them to drive the USO higher because of contango in the market. And I don't see them going into the drillers or oil services names with the moratorium on deep-water drilling in place.

Personally, I'm playing energy, with a long position in Suncor, he reveals, as a bet on the Canadian Oil Sands.

For a second derivative trade, think about getting long some of the tanker stocks, muses Karen Finerman. If an abundance of oil goes into storage, it should be to their benefit.


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TRADER DISCLOSURE: ON JUNE 7, 2010, THE FOLLOWING STOCKS AND COMMODITIES MENTIONED OR INTENDED TO BE MENTIONED ON CNBC’S FAST MONEY WERE OWNED BY THE FAST MONEY TRADERS; TERRANOVA OWNS (SWN); TERRANOVA OWNS (GLD); TERRANOVA OWNS (RIG); TERRANOVA OWNS (IPSU); TERRANOVA OWNS (RSX); TERRANOVA OWNS (PFE); TERRANOVA OWNS (TER); TERRANOVA OWNS (APA); TERRANOVA OWNS (AXP); TERRANOVA OWNS (BMO); TERRANOVA OWNS (BBY); TERRANOVA OWNS (DIS); TERRANOVA OWNS (XCO); TERRANOVA OWNS (AAPL); TERRANOVA OWNS (CVS); TERRANOVA OWNS (IPI); TERRANOVA OWNS (TEVA); TERRANOVA OWNS (FXB); TERRANOVA OWNS (IPI); TERRANOVA OWNS (SU); TERRANOVA OWNS (V); GARTMAN OWNS (AAPL);GARTMAN OWNS (NFLX);GARTMAN IS SHORT (GS); GARTMAN IS SHORT THE S&P 500; GARTMAN IS SHORT THE YEN; GARTMAN IS SHORT THE POUND; GARTMAN OWNS GOLD; PETE NAJARIAN; PETE NAJARIAN OWNS (AMD) CALLS; PETE NAJARIAN OWNS (C); PETE NAJARIAN OWNS KELLY OWNS (GS) PUTS; KELLY OWNS (SPY) PUTS

FOR JOE TERRANOVA
TERRANOVA WORKS FOR (VRTS)
TERRANOVA IS CHIEF MARKET STRATEGIST OF VIRTUS INVESTMENT PARTNERS, LTD.
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (AMKR)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (IGE)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (DBV)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLB)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLV)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLP)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLY)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLI)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLU)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (DRYS)

BRIAN KELLY
KANUNDRUM CAPITAL IS SHORT (GS)
KANUNDRUM CAPITAL IS SHORT (CME)
KANUNDRUM CAPITAL IS SHORT THE EURO
KANUNDRUM CAPITAL IS SHORT (XLK)
KANUNDRUM CAPITAL IS SHORT (XLI)
KANUNDRUM CAPITAL IS SHORT (XLF)
KANUNDRUM CAPITAL IS SHORT (XLB)
KANUNDRUM CAPITAL IS SHORT (FCX)
KANUNDRUM CAPITAL IS LONG (TLT)
KANUNDRUM CAPITAL IS LONG U.S. DOLLAR
KANUNDRUM CAPITAL IS LONG (GLD)
KANUNDRUM CAPITAL IS LONG (GFI)
KANUNDRUM CAPITAL IS LONG (AUY)

CHRIS MUTASCIO
**NO DISCLOSURES**

GENE MUNSTER
PIPER JAFFARY MAKES A MARKET IN (AAPL)
PIPER JAFFARY MAKES A MARKET IN (GOOG)

MIKE KHOUW
CANTOR FITZGERALD & CO. MAKES A MARKET IN (SPY)

LATE ADDITIONS:
FINERMAN'S FIRM IS SHORT (IJR)
FINERMAN'S FIRM IS SHORT (IWM)
FINERMAN'S FIRM IS SHORT (SPY)
FINERMAN'S FIRM IS SHORT (MDY)
FINERMAN OWNS (AAPL)
FINERMAN'S FIRM AND FINERMAN OWN (HPQ)
FINERMAN OWNS (GS) CALLS
FINERMAN'S FIRM OWNS (JPM), (J)PM) CALLS
FINERMAN OWNS (JPM)
FINERMAN'S FIRM OWNS (BAC), (BAC) CALLS
FINERMAN OWNS (BAC), (BAC) PREFERRED
FINERMAN'S FIRM AND FINERMAN OWN (CVS)
FINERMA'NS FIRM OWNS (BP) CALLS
FINERMAN OWNS (RIG) CALLS
FINERMAN OWNS (RIG) CALLS


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