Eddie Seal | Bloomberg | Getty Images
A tanker truck passes the Valero Energy Bill Greehey refinery in Corpus Christi, Texas, Oct. 4, 2012.
"Halftime Report"
trader Joe Terranova, currently in second place in CNBC's Halftime
Report Model Portfolio competition, made a trade that will benefit from
the oil supply glut in Cushing, Okahoma, the hub for WTI crude.
Even with oil falling another 1 percent Thursday to below $48 a barrel, Terranova bought shares of Valero Energy on the notion that the refiner will benefit as Cushing reaches its capacity limit.
"People are going to have to get rid of all that oil some time," said the trader.
Terranova, who built up an expertise in oil when he
worked for Mark Fisher of MBF Clearing Corp. at the New York Mercantile Exchange, points out that the spread between WTI and Brent crude, the European benchmark, is telling us something. European oil is not falling as fast as WTI so the spread between the two has widened to $10 a barrel. Earlier this year, Brent was actually cheaper than the U.S. benchmark.
Even with oil falling another 1 percent Thursday to below $48 a barrel, Terranova bought shares of Valero Energy on the notion that the refiner will benefit as Cushing reaches its capacity limit.
"People are going to have to get rid of all that oil some time," said the trader.
Terranova, who built up an expertise in oil when he
worked for Mark Fisher of MBF Clearing Corp. at the New York Mercantile Exchange, points out that the spread between WTI and Brent crude, the European benchmark, is telling us something. European oil is not falling as fast as WTI so the spread between the two has widened to $10 a barrel. Earlier this year, Brent was actually cheaper than the U.S. benchmark.
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