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Halftime—Pro Trader: Oil Could Fall to $85 a Barrel

Oil prices are likely to fall back into the familiar trading range of $85 to $102 a barrel once the Libyan unrest is resolved, Stuart Frankel's Steve Grasso said Monday.

Absent a very specific catalyst, it appears Grasso expects the market to grow somewhat more comfortable with events in the Middle East over the weeks and months ahead.

"For me once we once we get past Libya, I think we go back to that trading range," the "Fast Money" trader said.

Escalating violence in the OPEC member country has put the oil markets on edge in recent weeks. In the past five trading days, a barrel of oil has went from a low of $96.92 to a high of $106.83 a barrel.

John Stephenson, senior vice president of First Asset Investment Management, thinks oil could go to $200 a barrel in the next two years, if not spike to that level in the near-term. The author of "The Little Book of Commodity Investing," Stephenson has long been bearish on commodities, including oil.

Saudi Arabia and other OPEC-member countries have boosted oil output to offset supply disruptions in Libya, but Stephenson doesn't think that's sustainable. In the next two years, he thinks the fundamentals will bring oil to $131 to $140 a barrel. Oil speculators will then push prices up to $200 a barrel once they realize Saudi Arabia can't continue to pump oil at the rate it has been, Stephenson said.

Like Grasso, Stephenson thinks oil prices will fall once Libya's geopolitical issues are resolved. Stephenson thinks prices will dip to just $90 a barrel, however. He then thinks prices will rise to $120 after a few months time.

Being as he thinks oil will only continue to climb to $200 in the next few years, Stephenson recommends BP , Canadian Natural , Halliburton and Schlumberger . He said HAL could double in the next year and SLB could be 50 percent higher in the next year.

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POPS & DROPS

The "Fast Money" traders on Monday discussed the market movers that caught their attention. Watch the video to see which names they are interested in.

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Trader disclosure: On Mar. 7, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Steve Grasso owns (ASTM), (BA), (BAC), (BWC), (C), (CSCO), (JPM), (LIT), (LPX), (MT), (MHY), (NDAQ), (PFE), (PRST) and (S). Zachary Karabell owns (FCX), (AAPL), (RIMM), (GE), (FXI), (GOOG) and (C). Pete Najarian owns (F) bonds. Pete Najarian owns (C). Pete Najarian owns (MS). Pete Najarian owns (CNI). Pete Najarian owns (TCK). Pete Najarian owns (GE). Pete Najarian owns (BAC) calls. Pete Najarian owns (JPM) call spreads. Pete Najarian owns (KH) call spreads. Pete Najarian owns (MU) calls.

Comcast Is The Parent Company Of CNBC
Comcast Is The Parent Company Of NBCUniversal
GE Owns 49% Of NBCUniversal
GE Owns 49% Of CNBC

STEVE GRASSO
Stuart Frankel & Co and its partners own (AMGN)
Stuart Frankel & Co and its partners own (CSCO)
Stuart Frankel & Co and its partners own (CUBA)
Stuart Frankel & Co and its partners own (GERN)
Stuart Frankel & Co and its partners own (HPQ)
Stuart Frankel & Co and its partners own (HSPO)
Stuart Frankel & Co and its partners own (MSFT)
Stuart Frankel & Co and its partners own (NYX)
Stuart Frankel & Co and its partners own (PFE)
Stuart Frankel & Co and its partners own (PRST)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners own (SDS)
Stuart Frankel & Co and its partners own (UAL)
Stuart Frankel & Co and its partners own (XRX)
Stuart Frankel & Co and its partners are short (QQQQ)
Stuart Frankel & Co and its partners are short (AAPL)

ZACHARY KARABELL
Karabell and River Twice Capital Own (CSCO)
Karabell and River Twice Capital Own (GS)
River Twice Capital owns (QCOM)
River Twice Capital owns (IBM)
River Twice Capital owns (SBUX)
River Twice Capital is short (S)
River Twice Capital is short (SPY)
River Twice Capital is short (XLI)
River Twice Capital is short (XLF)
River Twice Capital is short (SMH)

BRIAN KELLY
Accounts Managed By Kanundrum Capital Are Long Oil
Accounts Managed By Kanundrum Capital Are Long Gold
Accounts Managed By Kanundrum Capital Are Long Silver
Accounts Managed By Kanundrum Capital Are Long U.S. Bonds
Accounts Managed By Kanundrum Capital Are Long The Euro
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (IAU)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (SLV) calls
Accounts Managed By Kanundrum Capital Own (GLD) calls
Accounts Managed By Kanundrum Capital Own (EBAY)
Accounts Managed By Kanundrum Capital Own (SPY) puts
Accounts Managed By Kanundrum Capital Are Short The U.S. Dollar
Accounts Managed By Kanundrum Capital Are Short S&P Futures
Accounts Managed By Kanundrum Capital Are Short (XRT)
Accounts Managed By Kanundrum Capital Are Short (XLF)
Accounts Managed By Kanundrum Capital Are Short (IXG)
Accounts Managed By Kanundrum Capital Are Short The Yen

JOHN STEPHENSON
Stephenson and First Asset Investment Management own (HAL)
Stephenson and First Asset Investment Management own (SLB)
Stephenson and First Asset Investment Management own (BP)
Stephenson and First Asset Investment Management own (SU)
Stephenson and First Asset Investment Management own (CNQ)
Stephenson and First Asset Investment Management own (SLW)
Stephenson and First Asset Investment Management own (SLV)

DAVID WONG
Wells Fargo Securities, LLC Is A Market Maker In (AMD), (ALTR), (ADI), (BRCM), (INTC), (LLTC), (MXIM), (MU), (MSCC), (NSM), (QCOM), (TXN), (XLNX)
Wells Fargo Securities, LLC And/Or Affiliates Own 1% Or More Of (ADI), (MU), (MSCC), (TXN)
(INTC), (MU), (QCOM) Is Or In Past 12 Months Was A Non-Investment Banking Client Of Wells Fargo Securities, LLC
Wells Fargo Securities, LLC Recieved Non-Investment Banking Comepnsation From (INTC), (MU), (QCOM) In Past 12 Months
Wells Fargo Securities, LLC Or Affiliates Owns 9% Of (MSCC)
Wells Fargo Securities, LLC Or Affiliates May Have A Significant Financial Interst In (AMD), (ALTR), (ADI), (BRCM), (INTC), (LLTC), (MXIM), (MU), (MSCC), (NSM), (QCOM), (TXN), (XLNX)

CNBC.com with wires.

Symbol
Price
 
Change
%Change
BP.
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CNQ
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HAL
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SLB
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