After surging higher the last several sessions, oil is giving back some of its gains Tuesday. What kind of impact is that having on other companies sensitive to energy prices?
There are definitely some signs that traders are starting to put on short positions, explains Pete Najarian. The market reached $90 oil much faster than anyone would have predicted. Because of that we’re seeing some bearishness.
However, the market isn’t looking for a significant pullback in November. The options are going farther out. They are looking for a pullback over the next several months.
Pete adds, the airlines are reporting very strong earnings even with high fuel prices. (That suggests to Pete that they’re hedging well.) If we see a pull back in oil that could be very bullish for the airline sector.