Dennis Gartman May Soon Begin 'Several Years Of Buying' Oil Majors

Crude oil’s newest bull, Dennis Gartman, still likes what he sees in the oil market and says in his latest edition of The Gartman Letter that he may soon begin aggressively putting his money where his mouth is when it comes to the stocks of oil majors.

Just last week, Gartman became bullish on oil when his observation of oil market contango convinced him that the “informed money” has abandoned the bearish case for oil.

OPEC Dissent

So far, OPEC has stubbornly refused to consider dialing back crude oil production because they do not want to run the risk of losing market share to U.S. shale producers, most of which have higher production cost that OPEC does.

However, as prices have plummeted to 6.5-year lows, Algeria and Iran have publicly stated their desire for an emergency OPEC meeting. At this point, the Saudis remain convinced that no meeting is needed prior to the scheduled December meeting.

Bullish API Numbers

The latest American Petroleum Institute (API) oil inventories number was a pleasant surprise for bulls. API reported a 7.3 million barrel drawdown versus expectations of a build.

According to Gartman, these API numbers were “far, far larger than anyone anywhere had been forecasting and obviously quite bullish for crude oil all things being otherwise equal.”

Time To Buy?

Finally, after once again acknowledging how “consistently bearish” he has been on oil in recent months, Gartman proclaimed that his newfound bullish outlook for oil may soon push him to start accumulating stock.

He sees relatively little potential downside risk to oil majors and appreciates the strong dividends that many of them pay.

“Hence we may begin a program that hopefully shall last for several years of buying the shares of the truly ‘major’ oil companies such as Exxon Mobil and Anadarko Petroleum amongst others,” he explains.

In addition to majors such as ExxonMobil Corp XOM and Anadarko Petroleum Corp APC, Gartman also added that he has become bullish on big tanker stocks as well.