Oil Price: Point Counterpoint

Dennis Gartman on why oil prices will stay low:

“It’s 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. That’s not how bull markets function, that’s how bear markets function, and I think Mr. Pickens, a hero of mine, is wrong.”

“You hear talk about the Russians wanting to reduce supply. They can’t possibly because a good three-quarters of where they produce their oil is in very cold areas in Siberia. They don’t have those pipes insulated, they have to continue to pump crude oil through there. The Iranians and the Saudis hate each other. They have, for lack of a better term, a war going on — a gas price war. They’re not going to let go.”

“When you need cash flow, you produce and you don’t really care where the end price is. You keep producing it.”

“The bear market has not ended in oil. If we start to go sideways for four, five months, companies will become profitable again at these levels.”

T. Boone Pickens on why Gartman is wrong and how oil prices will rebound:

“Once you hit bottom which I think was $26.15 on WTI, you’re going to double within 12 months by historical information. So here you are at $30 and I think you’ll be at $52 by the end of the year.”