Gartman: Get ready for oil bankruptcies

Shale oil firms in the U.S. will suffer in the next two years due to the dramatic fall in the price of the commodity, according to Dennis Gartman, the founder and editor of the Gartman Letter, who expects a further fall in prices in the near term.

The commodities investor has turned slightly more bearish on oil since last week, telling CNBC Tuesday that "crude oil prices haven't seen their lows yet."

"I'm afraid we're going to see demonstrably lower prices still," he said. "Demand is weak and that price is going to continue to go down more."

Read MoreDoubt oil will go much lower: Gartman

The U.S. has seen a revolution in gas and oil production in the U.S. with new technology unlocking new shale resources. This oil and gas boom has spurred economic activity and giving industry a competitive edge with less expensive fuel prices. However, the recent drop in prices - with Brent crude and WTI crude both down around 47 percent since mid-June - is set to impact the blossoming sector over the next two years, Gartman fears.

"There will clearly be bankruptcies," Gartman said, name checking oil production sites like the Permian Basin and the Marcellus Shale. U.S. oil production is a private-sector venture and differs wildly from the state-run companies in the Gulf states and South America.

Dennis Gartman
Adam Jeffery | CNBC
Dennis Gartman

These countries are able to extract oil from the ground at a cheaper cost than U.S. shale firms and there has been speculation that the two different industries could be playing a "game of chicken" over the price of oil before cutting back to ease the oversupply. A brief rally for oil on Monday was cut short with Saudi Arabian Oil Minister Ali al-Naimi stating that Organization of the Petroleum Exporting Countries would not cut production at any price, according to Reuters.

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Oil majors in Europe also received a stark warning this week with credit ratings agency Standard & Poor's (S&P) placing BP, Total and Shell all on a negative watch. The change now means that the three firms are more likely to have their debt rating downgraded in the next three months.

S&P stated that the companies are entering the downturn with "moderately leveraged" balance sheets with the dividends it pays to its shareholders rising in the last three years.

"Compared with December 2008, debt for Europe's majors has increased 50 percent, pointing to reduced flexibility," analysts at S&P said in its research note late Monday.

BP was the first European major to sound the alarm on December 10 when it warned that it is implementing a cost-cutting program due to the tumbling prices. S&P now predicts the Brent oil price will be at an average of $70 a barrel in 2015, $75 a barrel in 2016 and $85 a barrel thereafter.