Gartman: Oil 'panic' could sink prices to $15

Rig hands move equipment at a hydraulic fracturing site atop the Marcellus shale rock formation in Washington Township, Pennsylvania.
Gartman: New era for oil

Fresh concerns over China's slowing economy sent oil prices into a steep decline to start off the week.

Before rising Tuesday to near $32 a barrel, crude fell 6 percent Monday and had lost 14 percent in 2016. Widely followed commodities watcher Dennis Gartman said the plunge could be the start of a new norm for oil.

"Let's not forget that a year and a half ago, I said that we were probably going to get to the mid $30s when crude oil prices were trading at $125 per barrel," he said on CNBC's "Fast Money" on Monday. "Here we are at $32 and the pressure is still on. I thought we would see some support. Clearly we haven't."

But rather than point the finger at China for falling oil prices, Gartman instead looked to Canada as the hot spot for the continued buildup in supply.

Read More Oil prices rise to $32 after hitting multi-year lows

"The real problem is that Western Canadian Select continues to come down out of Canada. It's trading $14 per barrel this afternoon, a huge discount to WTI. It tends to trade $7-8 discount," said Gartman.

The plunge in oil prices is a constant reminder of the glut in the market. Morgan Stanley reiterated its concerns in a recent note forecasting oil prices could fall into the $20s with the strength in the U.S. dollar against major currencies.

Gartman agrees with that forecast, but he sees crude spending only a short period of time at those depressed levels.

"The dollar is the predominant deciding factor at this point, and as long as the dollar continues to go higher, and it does, the pressure will remain on the crude oil market. I really thought that $32 might hold. I actually thought that would be the furthest that we could extend it down to, but we're getting a panic situation. And in panic you can get an egregiously lower price," he said.

According to Gartman, the bottom is not in for oil: It could fall much further.

"Egregiously lower — $15, $16, $17, $18 per barrel on the front month for a day or two but it won't last long down there," he said.