Breakout

As Gas Prices Rise, Oil Stocks Can Ease the Pain: Najarian

Jeff Macke
Breakout

Crude prices have been rolling higher lately and it doesn't like things are going to improve anytime soon. OPEC recently lifted its production forecast for 2013, adding fuel to a fire already being felt by consumers. Prices at the pump currently sit at a a national average of $3.74, up over 10% from just a month ago.

You can't do anything about rising gas prices, but Jon Najarian, co-founder of OptionMonster.com has some ideas about how investors can profit from rising demand. He joined Breakout to share some names being played by traders betting on gains to come.

Najarian's first idea is Western Refining (WNR) a "Mid-continent" play on the price discrepancy in refining costs. Najarian says WNR is picking up extra volume and pleasing investors who are still getting long despite the stock's big move since 2012.

Going deeper into the space Najarian is bullish on anyone making the drills and equipment needed to feed the beast. First on his list is National Oilwell Varco (NOV). The company provides the equipment for not just oil but gas drillers. As the President made clear in his State of the Union address, the country is going deeper into natural gas. That's NOV's advantage.

Last on his list is one of the more loathed companies in a much hated space. Having been left for dead after the Gulf oil spill, Anadarko Petroleum (APC) has more than doubled since mid 2010. The stock has already gained more than 10% in 2013 but Najarian says the options pits suggest there's more to come. "I see people buying calls to the upside" he exclaims. That's somewhat unusual action after such a big move, a cue to Najarian that the smart money is getting even more bullish.

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