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Oil bear market will end in panic liquidation: Gartman

The bear market in U.S. crude will continue, eventually ending one day in "panic liquidation," widely followed investor Dennis Gartman predicted Wednesday.

"It will end when you've had an announcement of five or six bankruptcies. It will end when mergers and acquisitions step in and take over," the founder and editor of The Gartman Letter said on CNBC's "Closing Bell."

U.S. crude (WTI) futures closed at their lowest in more than six years on Wednesday at $40.80 a barrel after U.S. data showed an unexpected rise in crude stockpiles.

Oil has lost about a third of its value since June. U.S. oil production is at record levels and producer costs appear to be declining, with no output scaleback anticipated.

U.S. production, which declined slightly two weeks ago, remains steady in the week of Aug. 14 at 9.348 million barrels a day, versus 9.395 million barrels the week earlier.

"The only people who are going to survive this are the people who used the WTI and the Brent oil futures to hedge production two and three and four years forward," said Gartman.

On Friday, KKR's Samson Resources said it finalized a restructuring plan with key creditors that it expects to implement under a Chapter 11 bankruptcy reorganization and which will give the creditors control of the company.

Gartman expects more news of restructuring and consolidation "very soon."

"I think the banks in the oil patch are looking around right now for people who can take some of those bad investments off their hands," he said.

He thinks those who come out on top will be unknown, privately held companies out of West Texas.

Trader James Cordier also sees "major problems" for the energy industry this fall, predicting oil could plunge as low as $30 per barrel by the end of the year.

"We're going to see some … production destruction and at that time were going to have probably some energy companies really bailing here in the United States and then possibly in November, December we could see a nice low in the market and time to jump in," Cordier, founder of OptionSellers.com, told "Closing Bell."

Takeover targets?

For analyst Kyle Cooper, it is the mid-size companies with good assets and strong operational teams that could be good takeover targets for large companies looking to acquire names at "pretty distressed prices."

However, those mid-size firms could also merge among themselves or acquire smaller names.

"Liquidity is going to reign supreme here in the coming months," the director of research for IAF Advisors told "Closing Bell."

"If you have good balance sheets, strong assets and low debt, you are going to be a strong position to look across the aisle, look up, look down, look all around for the possibility of acquiring some assets on the cheap."

He thinks those mid-cap names could include Devon Energy, Range Resources and EOG Resources.

—Reuters contributed to this report.