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Dan Dicker: Iran Could Lead to $7-Per-Gallon Gas

Friday, 24 Feb 2012 | 1:22 PM ET

Gas prices are virtually guaranteed to soar — maybe even to $7 per gallon — as concerns over Iran push crude oil higher, Mercbloc President Dan Dicker said Friday.

“We have a gas situation here that can’t do anything but go up,” he said on “Fast Money.” “Most everybody is long. It’s definitely going to go higher.”

$4 Gas Could Happen: Energy Trader
$4 gas is a certainty and it can go to $5, says Dan Dicker, president of MercBloc.

Dicker said $4-per-gallon gas is almost a certainty, with a strong likelihood of it hitting $5 by summer, amid threats of supply disruption from Iran.

“If the Israelis lose their patience, it might in fact go to $7,” he said.

Dicker said commodities traders were not yet factoring in a decision from President Obama to release the U.S. strategic petroleum reserve anytime soon.

“There’s no question in an election year that the president’s at some point is going to hit the SPR,” he said, adding that such a move might happen by summer or fall.

Companies with exposure in alternate oil-rich regions such as Mozambique and Angola were worth a look, as well as smaller players which can replace some of the lost supply in case of a significant disruption, Dicker said, pointing to Apache and BP.

Trader Stephen Weiss argued that this time was different from other periods where oil broke through $100 a barrel. He pointed to a recent Bank of America study that found that geopolitical causes for rising prices impacted GDP by 0.5 percent, while that factor was 0.1 percent when it was influenced by demand.

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Trader disclosure: On Feb. 24, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Najarian is long AAPL call spreads; Najarian is long IBM call spreads; Najarian is long CRM call spreads; Najarian is long SODA call spreads; Najarian is long JCP call spreads; Najarian is long ACI call spreads; Najarian is long FIO call spreads; Najarian is long UTX call spreads; Weiss is long EUO; Weiss is long WLP; Weiss is long QCOM; Weiss is long CHK; Weiss is long HK; Weiss is long KEG; Weiss is long VZ; Weiss is long MDRK; Weiss is short ANR; Weiss is short MT; Weiss is short AAPL puts

For Brian Kelly
Shelter Harbor Capital is long GLD

Shelter Harbor Capital is long TLT

Shelter Harbor Capital is long Treasury bonds

For Patty Edwards
Trutina Financial is long AAPL

Trutina Financial is long JNK

Trutina Financial is long SPDR Gold Trust (GLD)

Trutina Financial is long Excelon (EXC)

Trutina Financial is long PM (personal and for clients)

Trutina Financial is long CBI

For Camilla Sutton
No disclosures

For Dan Dicker
Dicker is long oil

Dicker is long APA

For Mark Moerdler
Accounts over which Bernstein and/or their affiliates exercise investment discretion own more than 1% of the outstanding common stock of the following companies CA / CA Inc, CTXS / Citrix Systems Inc.

Bernstein currently makes a market in the following companies ADBE / Adobe Systems Inc, CTXS / Citrix Systems Inc, MSFT / Microsoft Corp, ORCL / Oracle Corp.

For Dan Binder
(TGT): I, Daniel Binder, CFA, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report.

For Chris Ceraso
The subject company (CSX, NSC, UNP) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse.

Credit Suisse provided investment banking services to the subject company (CSX, UNP) within the past 12 months.

Credit Suisse provided non-investment banking services, which may include Sales and Trading services, to the subject company (NSC) within the past 12 months.

Credit Suisse has managed or co-managed a public offering of securities for the subject company (CSX, UNP) within the past 12 months.

Credit Suisse has received investment banking related compensation from the subject company (CSX, UNP) within the past 12 months.

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (CSX, UNP) within the next 3 months.

Credit Suisse has received compensation for products and services other than investment banking services from the subject company (NSC) within the past 12 months.

As of the date of this report, Credit Suisse Securities (USA) LLC makes a market in the securities of the subject company (CSX, NSC, UNP).

For Bill Chappell
SunTrust Robinson Humphrey, Inc. has no disclosures.

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