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Pro: Oil Could Be Headwind for Market in 2012

Energy stocks led the market higher Tuesday following a positive report on U.S. consumer confidence, an Italian bondauction and news of an attack by Iranian protestors on two British Embassy compounds in Tehran.

And according to “Fast Money” trader Joe Terranova, the play is oil—specifically, Brent crude .

“When you look at the supply [and] you look at the demand, the demand is strong enough and the supply itself—particularly in the non-OPEC producers—is beginning to contract,” he said. “So I think oil is your play. It is what I am most invested in right now.”

In fact, he thinks it will remain the play well into 2012 and could help lift the market.

“I think in 2012 it actually potentially shifts to a headwind for the overall markets at some point,” Terranova added.

Plus, energy equities are now pricing in $95 to $100 Brent crude, and he thinks they are starting to play catch up.

Trader Steve Cortes agrees that the energy sector is where to be right now—he’s long the XLE . However, he noted WTI seems unable to get above the $100 hurdle, and if doesn’t do so in the next couple of days, he’s may take profits.

MercBloc’s Dan Dicker isn’t particularly interested being long oil right now, but he said now is certainly not the time to get short because of events in Iran. Iranian protestors stormed the British Embassy compounds in Tehran to protest against sanctions imposed by Britain over Iran’s controversial nuclear program.

“The fundamental picture to me is not particularly bullish right now,” he said. “These are the kinds of geopolitical events that come up all the time that make it very difficult to be short crude.”

While he thinks it is temporary, it is also fairly serious. And how much higher oil goes depends on how much events in Iran ratchet up, Dicker said.


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Trader disclosure: On November 29, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders;

JOE TERRANOVA
Long: SBUX, DECK, TRLG, LULU, CAT, CSCO, HES, SU, EMC, IBM, AXP, MUB, LQD

PATTY EDWARDS
Long for Clients: TGT, AAPL, CVX, PM, (Patty also personally owns), CBI

BRIAN KELLY
Fund is long: AAPL, DE, CAT, CLNE, GLNG, IBM, MSFT, PM, SNDK, SYY, BRENT OIL, COPPER, FCX, AUSSIE DOLLAR, CORN FUTURES
Fund is short: Japanese yen, EWO

STEVE CORTES
Long: XLE, S&P 500, Treasuries,
Short: XRT, QQQ, DB

DAN DICKER
Long: RIG

CAMILLA SUTTON
Scotia Capital
Firm makes market in Australian Dollar and Euro

MICHAEL PACHTER
Wedbush Securities
No disclosures

TAVIS MCCOURT
Morgan Keegan
No Disclosures

AMIT DARYANANI
Securities Recommended: Amphenol Corporation. Benchmark Electronics, Inc.. Celestica Inc.. Dell Inc.. EMC Corporation. Emulex Corporation. Flextronics International Ltd.. Hewlett-Packard Company. International Business Machines Corporation. Jabil Circuit, Inc.. Molex Incorporated. NetApp, Inc.. Plexus Corp.. QLogic Corporation. Sanmina-SCI Corporation. Seagate Technology. Sensata Technologies Holding N.V.. TE Connectivity Ltd.. Xyratex Group Limited.

Details / Comments: CNBC Business News
( internal identifier: 19308 )

Disclosures
Sensata Technologies Holding N.V.:
A member company of RBC Capital Markets or one of its affiliates managed or co-managed a public offering of securities for Sensata Technologies Holding N.V. in the past 12 months.

Sensata Technologies Holding N.V.:
A member company of RBC Capital Markets or one of its affiliates received compensation for investment banking services from Sensata Technologies Holding N.V. in the past 12 months.

Molex Incorporated:
Royal Bank of Canada, together with its affiliates, beneficially owns 1 percent or more of a class of common equity securities of Molex Incorporated.

Celestica Inc.:
RBC Capital Markets is currently providing Celestica Inc. with non-securities services.

Sensata Technologies Holding N.V.:
RBC Capital Markets is currently providing Sensata Technologies Holding N.V. with non-securities services.

International Business Machines Corporation:
RBC Capital Markets is currently providing International Business Machines Corporation with non-securities services.

Sensata Technologies Holding N.V.:
RBC Capital Markets has provided Sensata Technologies Holding N.V. with investment banking services in the past 12 months.

Dell Inc.:
RBC Capital Markets has provided Dell Inc. with non-investment banking securities-related services in the past 12 months.

Seagate Technology:
RBC Capital Markets has provided Seagate Technology with non-investment banking securities-related services in the past 12 months.

International Business Machines Corporation:
RBC Capital Markets has provided International Business Machines Corporation with non-investment banking securities-related services in the past 12 months.

Dell Inc.:
RBC Capital Markets has provided Dell Inc. with non-securities services in the past 12 months.

Celestica Inc.:
RBC Capital Markets has provided Celestica Inc. with non-securities services in the past 12 months.

Jabil Circuit, Inc.:
RBC Capital Markets has provided Jabil Circuit, Inc. with non-securities services in the past 12 months.

Sensata Technologies Holding N.V.:
RBC Capital Markets has provided Sensata Technologies Holding N.V. with non-securities services in the past 12 months.

CNBC.com with wires.

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