Energy bulls prepare for disappointment. Commodities pro Dennis Gartman doesn’t think any rally in oil will be sustainable.
“I don’t see how an advance can be sustainable,” says Gartman. “The amount of oil coming onto the market - is overwhelming.” First and foremost Gartman believes Saudi Arabia intends to keep the world well supplied because they want to keep prices low and squeeze Iran, which is more susceptible to lower oil. (Saudi Arabia and Iran are longtime rivals with Tehran openly challenging the legitimacy of the royal House of Saud.)
But that's not the only negative catalyst for oil.
In addition, Gartman believes the market will be well supplied due to discoveries made right here in the US such as the massive discovery in North Dakota’s Bakken Shale.And Gartman thinks the abundance of nat gas in the US is negative for oil because trucking companies have a strong incentive to convert their fleet to alternative energy.All told, “I can see the rally in oil lasting another $2-$3 dollars but any bounce should be sold,” he says. “At the end of the day, I’d be a seller.”
Posted by CNBC's Lee Brodie
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