Gartman says Pickens is Wrong on Oil ... Here is Why

Oil & Natural Gas / Conventional Oil & Gas Resources / Economics

Date posted: 02/07/16

Leanne Miller reports that closely followed market watcher Dennis Gartman says billionaire Boone Pickens prediction that the bottom is in for oil is off base. It is a supply circumstance. You can see it in the term structure of the futures market on Friday, when you had a strong rally, the back months led the way up, Gartman told CNBC Fast Money traders on Monday. That is not how bull markets function, that is how bear markets function, and I think Mr. Pickens, a hero of mine, is wrong. Pickens, who built Mesa Petroleum into a powerhouse and founded BP Capital Management, told CNBC that oil would be trading at $52 by year's end. Once you hit bottom which I think was $26.15 on WTI, you are going to double within 12 months by historical information, Pickens said. So here you are at $30 and I think the market will be at about $52 by the end of the year. In the longer term, Gartman sees oil in a $27 to $47 range with many of the volatile swings behind it. The bear market has not ended in oil, said Gartman. If we start to go sideways for four, five months, companies will become profitable again at these levels.