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Gartman: Oil Won’t Spike on Gaza Attack

If you're an energy trader chances are you trying to determine what happens to the price of oil in the wake of an unexpected Mideast attack.

On Wednesday, Israel launched a major offensive against Palestinian militants in Gaza killing the military commander of Hamas.

Immediately calls for revenge were broadcast over Hamas radio and the Islamist group vowed the attack would "open the gates of hell".

Israel confirmed it carried out the attack and announced more to come.

Typically trouble in the Middle East translates into higher oil prices but according to top commodity trader Dennis Gartman, not this time.

Price is truth and the price of crude only increased 1% on the news.

Symbol
OIL

He says what matters more is that the term structure continues to be in a definitive contango. (In other words the futures prices are above the expected future spot price. Consequently, the price will decline to the spot price before the delivery date.) Read More:"CNBC Explains Contango"And when oil is in contango, "you sell the strength you don't buy weakness," said Gartman.

"The fact that something like this happened and oil only rallied 85 cents in WTI, it says to me there's plenty of crude around and it's bidding for storage."

"If you're an oil bull I wouldn't get to excited," Gartman added.

Posted by CNBC's Lee Brodie

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Trader disclosure: On November 14, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long AAPL; Jon Najarian is long CSCO; Jon Najarian is long FB; Jon Najarian is long VOD; Jon Najarian is long RHT; Jon Najarian is long GLUU; Jon Najarian is long STSI; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is short puts in GLD; Jon Najarian is short puts in SLV; Jon Najarian is short puts in AGQ; Steve Weiss is long BAC; Steve Weiss is long C; Steve Weiss is long JPM; Steve Weiss is long AIG; Steve Weiss is long QCOM; Pete Najarian is long AAPL; Pete Najarian is long SBUX; Pete Najarian is long INTC CALLS; Pete Najarian is long FB; Pete Najarian is long MSFT; Dennis Gartman is long AUD; Dennis Gartman is long GOLD; Dennis Gartman is short YEN


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