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Is The $100 Oil Scare Over?

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Crude oil touched $98.62, a record intraday high, before finishing down for the day. How do you trade it?

Addison Armstrong, Director of Market Research at Tradition Energy joins the panel for this conversation. Following are excerpts.

How are you trading?

It’s got to be from the bullish side, says Armstrong. The long term trends are there. Nothing changed from Wednesday’s report.

How much of oil's current price is a function of demand?

Demand is strong and supply is tight, says Armstrong. The big driver Wednesday was the dollar. And the storms in Norway.

You mean to say a storm in Norway pushed oil higher?

There is no margin for error, replies Armstrong. If 80,000 barrels don’t come out of the North Sea, there’s a problem.

What did Lynn Westfall, Tesoro’s Chief Economist tell you, Karen?

He says inventory numbers are in-line but he doesn’t think crude will stay at these prices.

Do you agree Addison?

Fundamentally it’s too high, Armstrong says. Fundamentally it should be $60, But we’re probably going to $109.

Why $109?

That’s a technical level. (I say) let’s get there and get over it.

Pete Najarian adds that he’s heard oil could go as high as $150.

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Price
 
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Trader disclosure: On Nov. 7, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (CSCO); Najarian Owns (AMZN) Options, (C) Options, (DISH) Options, (GOOG) Options, (LDK) Options, (YHOO) Options; Finerman's Firm Owns (AEO), (WMT), (TWX), (TSO), (YHOO); Finerman's Firm Is Short (MDY),Short (IWM),Short (IJR), Short (MBI),Short (LEH),Short (MER); Finerman's Firm And Finerman Own (GS); Finerman's Firm Owns Russell 2000 Puts; Seygem Asset Management Owns (EEM), (F), (GFI), (GLD), (HMY), (LDK), (YHOO); Finerman's Firm Is Short (SPY)