He adds refiners are running at 88% utilization when they should be at 92%. We haven’t built a refinery on US soil in 30 years; the existing ones are getting old and they sometimes breakdown, he says.
Eric says the play is to short the refiner, Tesoro (TSO), on valuation because he thinks the stock is now oversold. He adds investors can also own TSO or other refiners such as Valero (VLO) and Marathon (MRO) on a dip.
Guy Adami says his play is Jacobs Engineering (JEC) because they help upgrade the aging refineries.
It’s worth nothing that Eric Bolling thinks the price of gas could hit $4 a gallon by July.
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On APR 27, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Strazzini Owns (NWS-A), (CBS) Bolling Owns (NMX), (SZE), (VE), (XOM),Gold, Silver, (TSO 120 puts -- May), Bolling is short Nasdaq Futures, and is short S&P Futures