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Dennis Gartman: Sell into Strength, Crude Oil Rally Won’t Last

Energy bulls prepare for disappointment. Commodities pro Dennis Gartman doesn’t think any rally in oil will be sustainable.

“I don’t see how an advance can be sustainable,” says Gartman. “The amount of oil coming onto the market - is overwhelming.”

First and foremost Gartman believes Saudi Arabia intends to keep the world well supplied because they want to keep prices low and squeeze Iran, which is more susceptible to lower oil. (Saudi Arabia and Iran are longtime rivals with Tehran openly challenging the legitimacy of the royal House of Saud.)

But that's not the only negative catalyst for oil.

In addition, Gartman believes the market will be well supplied due to discoveries made right here in the US such as the massive discovery in North Dakota’s Bakken Shale.

And Gartman thinks the abundance of nat gas in the US is negative for oil because trucking companies have a strong incentive to convert their fleet to alternative energy.

All told, “I can see the rally in oil lasting another $2-$3 dollars but any bounce should be sold,” he says. “At the end of the day, I’d be a seller.”

Posted by CNBC's Lee Brodie

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Trader disclosure: On July 2, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Dan Nathan is long BAC; Dan Nathan is long C; Dan Nathan is long JPM; Dan Nathan is long XLF; Dan Nathan is long IBM; Dan Nathan is long WMT; Dan Nathan is long RIMM; Dan Nathan is long SBUX; Dan Nathan is long BAC JULY 6 PUTS; Dan Nathan is long C JULY 28/25 PUT SPREAD; Dan Nathan is long JPM JULY 32/28 PUT SPREAD; Dan Nathan is long XLF JULY 14/12/10 PUT FLY; Dan Nathan is long IBM JULY 190/180 PUT SPREAD; Dan Nathan is long WMT JULY 67.50 PUTS; Dan Nathan is long RIMM JAN 20 CALLS; Dan Nathan is long SBUX AUG 50/45; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long PNC; Joe Terranova is long USB; Joe Terranova is long TCBI; Joe Terranova is long SBUX; Joe Terranova is long MNST; Joe Terranova is long PXD; Joe Terranova is long WFM; Joe Terranova is long NXPI; Joe Terranova is long NKE; Joe Terranova is long UPL; Joe Terranova is long AAPL; Joe Terranova is long EMC; Joe Terranova is long LPX; Pete Najarian is long AAPL; Pete Najarian is long AAPL CALLS; Pete Najarian is long BAC CALLS; Pete Najarian is long C; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long NKE CALLS; Brian Kelly is long QQQ; Brian Kelly is long TLT; Brian Kelly is short British Pound

For Dennis Gartman
Dennis Gartman is long GOLD in EURO and YEN terms

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Scott Nations is long SPY
Scott Nations is long BAC
Scott Nations is long C
Scott Nations is long JPM

For Mark Newton
Mark Newton is long AAPL
Mark Newton is long LULU

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