Screenshot via Bloomberg TV Dennis Gartman.
Dennis Gartman has a new forecast for oil: a lot lower.
In an appearance on CNBC's Fast Money on Monday, Gartman, publisher of the Gartman Newsletter, said that crude oil prices will fall demonstrably from current levels.
Earlier on Monday, it had been reported that Gartman saw crude oil going to $10 a barrel, but he backed a bit off that claim in his appearance on Monday, saying that maybe next time he ought to be a bit more circumspect when he talks to CNBC's producers.
But the central spirit of Gartman's not quite $10 call was still intact, with Gartman saying simply that the era of oil is over. At one point, Gartman went so far as to compare crude oil to whale oil, which became obsolete following the advent of crude in the early 20th century.
In discussing the "end of oil," Gartman referenced news from Lockheed Martin earlier this month that the aerospace giant has made a technological breakthrough in developing a power source based on nuclear fusion. And while Business Insider's Jessica Orwig reported that some in the scientific community are skeptical of this breakthrough, Gartman sees the potential in this breakthrough as being something of a death knell for oil.
Gartman also referenced other factors weighing on oil prices, namely a supply glut and a market that is contango.
A market is said to be in contango when the futures contract for a commodity is more than what the expected price will be in the future.
So basically, if I pay $80 for a futures contract for a barrel of oil I want to get next year, but if expectations are that the spot price of a barrel of oil will be $60 in a year, the futures contract — again, assuming the spot price doesn't move — will have to fall.
This is all a bit oversimplified.
But Gartman's central point is that things look absolutely terrible for crude oil, and while Gartman was reticent to commit to his $10 a barrel call, he added that "it doesn't really matter" where oil prices go exactly, except that they are definitely going lower.
Gartman's comments come after what was an ugly morning for oil, which fell below $80 a barrel for the first time since June 2012.
The tumble in oil came after analysts at Goldman Sachs cut their price target on WTI crude oil to $70 by the second quarter of next year.
In his note, Goldman Sachs analyst Jeff Currie wrote:
"We are lowering our oil price forecast to reflect the required slowdown in US production growth: our WTI crude oil forecast is $75/bbl for 1Q15 and 2H15 (from $90/bbl previously). Given our unchanged WTI-Brent spread forecast of $10/bbl, our Brent forecast is now $85/bbl ($100/bbl previously)... Our 2016 and long-term forecasts are now $80/bbl WTI, $90/bbl Brent. Uncertainty around the required price to slow down US shale production growth is a key risk to our price forecast."
After Monday's early sell off, oil futures were trading just below $81 a barrel near 5:30 p.m. ET.
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