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Crude's Confusing Action

Traders are keeping a close eye on the action in crude markets. Oil prices have moved up substantially recently and on Thursday they nearly touched a six-month high before late selling pared some of those gains.

Seems like oil has momentum, but oil bulls and bears are very much at odds over what happens next.

Bulls believe that prices are going higher, possibly much higher, on the belief that the global economy is taking a turn for the better. That could send demand for crude soaring.

The bears however remain skeptical. They point to inventory levels which are abnormally high, in fact they’re near their highest levels since 1990, as lower demand has sent more barrels into storage.

So, what’s the trade?

Crude is up 25% over the past 2 weeks while the S&P is only up about 13%, reveals Tradition Energy’s Addison Armstrong on Fast Money's Halftime Report. Prior to that they had been pretty well correlated. I’m looking for a pullback down to $53.

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Trader disclosure: On May 7th, 2009, 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 (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (F), (TX); Seygem Asset Management Is Short (DVN); Finerman's Firm Owns (CSCO); Finerman's Firm And Finerman Own (BAC) Preferred Shares And Are Short (BAC); Finerman's Firm Owns (C) Preferred Shares And Is Short (C); Finerman's Firm Owns (MSFT) And Owns (MSFT) Put Spreads; Finerman's Firm And Finerman Own (WFC) Preferred Shares, Finerman's Firm Is Short (WFC); Finerman's Firm Is Short (IJR),(MDY) (SPY), (IWM), (USO), (BBT)

Terranova Owns (GENZ), (ABT), (XBI); Terranova Is Long (DIS) Call Spreads; Terranova Is Short June Crude Oil; Terranova Is Short (JPM), (WYNN), (X), (MS), (JOYG), (HES), (BRCM), (POT); Terranova Is Short (IBM) Call; Terranova Is Short (XOM) Call Spreads

Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV); Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.

Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (CAL), (DLR), (EPR), (EXR), (IGE), (MEE), (DBC), (DBV), (DBA), (SKT), (UA), (CLB), (WBMD): Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co: Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights