Oil prices fell 2.2 percent on Thursday as deepening economic gloom and soaring crude inventories in the United States eclipsed geopolitical tensions that have put world supplies at risk.
The decline followed Wednesday's 12 percent drop, which marked the biggest daily percentage decline in the price of crude oil in more than seven years.
Oil prices have dropped more than $100 a barrel since July as a global financial crisis has cut consumer and business energy demand, threatening to shrink total world oil usage for the first time in 25 years.
What’s next for oil?
Joe Terranova recommends taking a hard look at the moves in oil prices over the last 3-months. “Use oil as an indicator to tell you when speculative risk is willing to be assumed again.” He says patterns in this chart lead him to believe that oil will not move higher anytime soon. “We’re not ready yet. We have to work off the supply glut.”
However, if you want exposure to the energy space he says you might consider Suncor , ConocoPhillips , National-Oilwell Varco as well as the Canadian Dollar ETF “because it remained resilient,” Terranova says.
To see our entire conversation with Joe Terranova please watch the video.
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Trader disclosure: On Jan. 8th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (POT), (WMT), (TM), (MGM); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (CSCO), (FCX), (MSFT), (ELN); Najarian Owns (XME) Calls, (NVLS) Calls, (NVDA) Calls; Najarian Owns (FCX) Short Calls; Najarian Owns (EEM) Long Call Spread ; Najarian Owns (ERTS) Long Call Spread; Najarian Owns (MSFT) Short Calls; Seymour Owns (AA), (BAC), (EEM), (F), (TSO); Seymour's Firm Owns (VIP)
Terranova Works For (VRTS): Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.: Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (DLR), (EPR), (EXR), (IGE), (SLB), (MAC), (DBC), (DBV), (SKT), (UA), (CLB); Virtus Investment Partners Owns More Than 1% Of Corporate Office Properties Trust SBI MD; Virtus Investment Partners Owns More Than 1% Of Goldman Sachs Financial Square Fund – Money Market Fund; Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights