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Fast Money

Oil Drops Most In 2 Months


The headline: Crude Oil Sheds 3.4% To $126.62, Worst Drop Since March 31.

The Dowclimbed Thursday and oil pricesdropped $4 as concerns about global demand and strength in the dollar countered a government report showing the biggest decline in U.S. stockpiles since 2004.

The decline extends oil's retreat from last week's record above $135 a barrel amid growing signs that global demand is slowing under the strain of high costs and economic turmoil in the United States.

Thursday's drop looks like profit taking to Dan Fitzpatrick, Contributor & Technical Analyst. He believes the uptrend should remain in tact and tells us that support is at $123.50. However if it breaks below that level, then look out below. But don’t make too much out of the move. just yet.

Pete Najarian agrees. If oil breaks $120 then he’d turn bearish but not right now.

Jeff Macke thinks oil will be a buy again if it slides another $5.



The headline: Dell Profit Tops Target

Dell , the world's second-largest personal computer maker, posted a higher-than-expected quarterly profit on Thursday driven by strong demand and lower operating costs.

Meanwhile CFO Don Carty said that Dell is still seeing hesitation to spend among corporate customers in the United States, although demand for server computers has held up.

I think you should take profits in Dell, says Guy Adami.



The headline: Google Leads Tech Higher After ComScore Data Shows 'Paid Click' Growth Surged In April

Google showed strong growth in its ability to convert Web searches into ads viewed, according to a closely watched industry report quoted by analysts on Thursday, and its shares rose 2.5 percent.

I prefer Intel , says Guy Adami, long-term.



The headline: Consumer Shares Lead Market Higher After MasterCard Boosts Profit, Revenue Guidance.

Mastercard stock jumped after the credit-card processor said it is now targeting annual net income growth of 20% to 30%, and revenue growth of 12% to 15%.

I loved this stock but now I think the easy money is over, says Guy Adami. Don't rush in.

Globally people are using their credit cards, counters Pete Najarian. I would look at Visa .



The headline: Joy Global, Coal Plays Pop Today, Adding To Market-Beating Performance This Year.

Mining equipment maker Joy Global is extracting profits from the booming commodities sector as orders soared past the $1 billion mark, prompting the company to raise its full-year guidance on a favorable outlook for global mining.

I think JOYG and Bucyrus are a buy on any pull back, says Guy Adami.

Amen brother! That’s according to Pete Najarian. 



The headline: Boss at Tesoro, No. 1 Refiner in the U.S. West, Gives Outlook for Crude, His Profits.

With oil surging one day and falling the next “Fast Money" turns to Tesoro CEO Bruce Smith for some insights.

“It’s supply and demand that’s driving the price,” says Smith. “Demand is very high right now.”

Although he recognizes other factors may have some influence, he feels that current price levels accurately reflect what the market will bear. However, Smith reminds us that Tesoro doesn’t profit from oil at these levels. “(The price of) crude oil is neutral for us. We operate on a margin. We are indifferent if crude is $130 or $100,” he says.

Smith also suggests that now might be a good time to invest in oil refiners. He feels the fundamentals set up positively. “Right now supply and demand are becoming balanced and margins are responding. So I think investors are missing an opportunity right now."

Word on the Street

Guy Adami agrees. For his final trade he recommends Tesoro as a buy.

To see our complete interview with Tesoro CEO Bruce Smith please watch the video.

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Trader disclosure: On May 29, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (BTU), (C), (AGU), (NUE), (GS), (INTC), (MSFT); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (SUN), (TSO), (VLO), (AAPL); Finerman's Firm Owns SPX Index Puts; Finerman's Firm Is Short (BIG); Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm And Finerman Own (GLNG); Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY): Pete Najarian Owns (AAPL), (ANR), (BHI), (TSO), (XTO), (XLF), (HPQ), (BKC) (MAS), (ENER), (SYMX) (SVNT); Pete Najarian Owns (BAC) Puts