• 15 mins ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 5 hours Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 9 hours Saudis To Award Nuclear Power Contracts In December
  • 12 hours Shell Approves Its First North Sea Oil Project In Six Years
  • 13 hours China Unlikely To Maintain Record Oil Product Exports
  • 14 hours Australia Solar Power Additions Hit Record In 2017
  • 15 hours Morocco Prepares $4.6B Gas Project Tender
  • 18 hours Iranian Oil Tanker Sinks After Second Explosion
  • 3 days Russia To Discuss Possible Exit From OPEC Deal
  • 3 days Iranian Oil Tanker Drifts Into Japanese Waters As Fires Rage On
  • 3 days Kenya Cuts Share Of Oil Revenues To Local Communities
  • 3 days IEA: $65-70 Oil Could Cause Surge In U.S. Shale Production
  • 4 days Russia’s Lukoil May Sell 20% In Oil Trader Litasco
  • 4 days Falling Chinese Oil Imports Weigh On Prices
  • 4 days Shell Considers Buying Dutch Green Energy Supplier
  • 4 days Wind And Solar Prices Continue To Fall
  • 4 days Residents Flee After Nigeria Gas Company Pipeline Explodes
  • 4 days Venezuela To Pre-Mine Petro For Release In 6-Weeks
  • 5 days Trump Says U.S. “Could Conceivably” Rejoin Paris Climate Accord
  • 5 days Saudis Shortlist New York, London, Hong Kong For Aramco IPO
  • 5 days Rigid EU Rules Makes ICE Move 245 Oil Futures Contracts To U.S.
  • 5 days Norway Reports Record Gas Sales To Europe In 2017
  • 5 days Trump’s Plan Makes 65 Billion BOE Available For Drilling
  • 5 days PetroChina’s Biggest Refinery Doubles Russian Pipeline Oil Intake
  • 5 days NYC Sues Five Oil Majors For Contributing To Climate Change
  • 6 days Saudi Aramco Looks To Secure $6B In Cheap Loans Before IPO
  • 6 days Shell Sells Stake In Iraqi Oil Field To Japan’s Itochu
  • 6 days Iranian Oil Tanker Explodes, Could Continue To Burn For A Month
  • 6 days Florida Gets An Oil Drilling Pass
  • 6 days Oil Prices Rise After API Reports Staggering Crude Oil Draw
  • 6 days Tesla Begins Mass Production Of Solar Shingles
  • 7 days EIA Boosts World Oil Demand Forecast For 2018 By 100,000 Bpd
  • 7 days Businessman Seeks Sale Of $5.2B Stake In Kazakhstan Oil Field
  • 7 days Exxon Accuses California Of Climate Change Hypocrisy
  • 7 days Norway’s Recovering Oil Industry Resumes Hiring
  • 7 days $2.3 Million Seized Following Singapore Oil Heist
  • 7 days China Nears 2016 Carbon Emissions Target
  • 7 days Oil Companies Respond Slow To New U.S. Lease Plan
  • 7 days Maduro To Issue First 100 Million Petros Despite Skeptics
  • 8 days Iraq Bans Kurdish Firm From Operating Kirkuk Oil Fields
Alt Text

The World’s Most Expensive Oil

There are hundreds of oil…

Alt Text

Saudis Slash Oil Price To Save U.S. Market Share

Saudi Aramco has further reduced…

After Burning Himself On The OPEC Deal: Gartman Says ‘’Buy Oil’’

Dennis Gartman

Just hours before the November 30 Vienna OPEC meeting, whose outcome sent the price of oil soaring, Dennis Gartman had a recommendation: "we are short of crude oil from yesterday; we’ll have stops on those positions on a closing basis this afternoon here in the States, with the intention of adding to those short positions once the OPEC meeting is behind us."

Oops: following the same day's 6% surge in oil, on December 1,Gartman had no other choice but to say that "clearly we were wrong/early/ill-advised in being short of crude one day before the official OPEC meeting but clearly too we remain suspicious of the cartel’s ability to keep its members aligned. Clearly we shall err bearishly of crude, but not for the moment, but perhaps later this month… perhaps."

Or not. Because less than two weeks after warning he would "err bearishly on crude later this month", Gartman has decided to throw in the towel, and arr bullishly on crude instead, to wit:

... although there seems to be no discernible shift in the term structures in the nearby futures as evidenced by the price matrices just below, there has been a material shift in the longer-term term structures as the contangos have indeed narrowed very sharply since yesterday. The averaged one year front month contango for Feb ’17/”Red” Feb ’18 has narrowed from $2.63 yesterday to $1.88 this morning. Further, it has narrowed from $2.64 one week ago, and perhaps most importantly it has narrowed from $5.08 one month ago! The tectonic plates have been and are continuing to shift beneath the “feet” of the crude oil market. Related: The Venezuelan Crisis Continues To Spiral Out Of Control

Perhaps most notably, the May ‘17/May ‘18 contango has disappeared entirely and is now in backwardation as “informed money” seems now to be betting that the OPEC/non-OPEC agreements on production cuts may actually succeed.

Finally then, recalling Lord Keynes’ admonition that when the facts changed regarding markets that he had been involved in he changed his opinion, we see the facts of the shifting term structure changing the composition of the crude oil market materially. Note then that Brent… and for that matter too, so also WTI… “gapped” higher yesterday and that that gap remains open as we write this morning. Barring material reasons not to do so, when markets “gap” higher we buy them and we shall buy crude oil this morning as a result.

The result, is a new "trade recommendation" for "clients" as follows:

NEW RECOMMENDATION: We know that this shall catch many off-guard given our marked propensity to have erred always bearishly of crude, but with the term structure shifting as bullishly as it has and with the markets for WTI and Brent having “gapped’ higher yesterday, and with those “gaps” still intact, we’ve no choice but to buy crude oil this morning upon receipt of this commentary. Related: Goldman Sachs Warns The Saudis: ‘’U.S. Shale Will Respond’’

 We shall not wish to risk much on this trade; the bottom of the gaps in front month WTI and Brent shall suffice; that is, if crude does close the “gaps” left to the upside we’ll exit the position. For now, we shall buy both February WTI and Brent upon receipt of this commentary… a “unit” of each being more than sufficient… happy to be buying it nearly $2/barrel below the highs of yesterday and as the markets are “correcting” that initial panic buying.

Incidentally, this is the same Gartman who on September 7 told CNBC that "investors shouldn't expect the commodity to break through $55 for a few years."

 As of this moment, Brent has "broken "through $56... and Gartman, who in January predicted that crude won't rise "above $44 again in his lifetime" has flip-flopped to bullish.

Sorry OPEC.

Finally, for those wondering what Gartman's position on stocks is at this moment, here is the answer: "we shall iterate that we are not suggesting that the market here in the States is so egregiously over-bought that it should be sold short into for this remains a bull market and in bull markets one can have only one of three possible positions: Very long of equities; reasonably or “pleasantly” long of equities, and neutral of equities. We are strongly urging the latter."

By Zerohedge

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Hahafunny on December 13 2016 said:
    Well, he is right in a sense, oil will come down, this 6% surge is fading. I do opposite what he suggests
  • David on December 13 2016 said:
    How is it that this man has any kind of notoriety or even an ounce of respect.
  • Pat on December 14 2016 said:
    Poor guy probably loses more money than I do
  • zorro6204 on December 18 2016 said:
    There's absolutely no reason to report anything this guy says, ever. He's been so spectacularly wrong it's embarrassing. Clearly he's just another talking head for CNBC who spends more time in makeup than actually staying in touch with the market.
  • Cousin V on December 24 2016 said:
    When is this guy right? Why does the media cater to this guy? Why would anyone buy his newsletter

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News