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In a sharp reversal, Gartman turns bullish on oil

Dennis Gartman
Adam Jeffery | CNBC
Dennis Gartman

Dennis Gartman, who in March warned that oil could hit $15 a barrel by the year's end, has turned bullish on the commodity, citing structural shifts in the crude market. (Tweet this.)

In fact, just two days ago, Gartman cautioned that the bear market in oil would continue to the point of a "panic liquidation."

But in a note Friday, the author of "The Gartman Letter" said, "For having been overtly and rather relentlessly ... and very publically ... bearish, we are this morning turning bullish of crude oil and we are turning so because the term structure shifts mandate that we do so."

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The contangos in both Brent and West Texas Intermediate have narrowed as prices have moved lower, which he sees as a sign of impending strength.

"We do not make this statement lightly for this is a material shift in our view of the energy market ... a very material shift," said Gartman, who is sometimes referred to as the "commodities king."

The call is a sharp reversal from his previous outlook. In March, Gartman said a combination of rapidly rising inventories and a strong dollar could lead to $15 oil by the end of the year.

U.S. crude prices were under pressure Friday as a decline in Chinese manufacturing intensified fears over the health of the world's biggest energy consumer.

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WTI prices are on track for their eighth straight week of declines, the longest losing streak since 1986. It's currently down about 5 percent on the week at around $41 a barrel.

Global benchmark Brent was headed for a 7 percent weekly drop and trading below $46 a barrel. WTI and Brent are down 24 percent and 21 percent year to date, respectively.

The averaged front-month contango for Brent and WTI has narrowed to $7.19 a barrel from $7.72 on Thursday and $8.24 earlier this week, Gartman notes. Contango occurs when a commodity trades above the expected future spot price.