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Dennis Gartman: ‘There's a real problem’ in oil market, bounce won’t last

  • There's a real problem out there in the crude oil market, Dennis Gartman told CNBC.
  • He believes the current rally is nothing but a "dead cat bounce."
  • Long term, he is still convinced crude is in a bear market.

Oil may be enjoying a rally in recent days, but don't bet on it lasting, noted commodities trader Dennis Gartman told CNBC on Wednesday.

Crude prices were higher on Wednesday, with U.S. crude futures closing up 50 cents, or 1.1 percent, at $44.74 a barrel. The move came after government data showed a bigger-than-expected drop in gasoline inventories and falling weekly U.S. crude output.

"There's a real problem out there in the crude oil market. You're going to get a rally and the market is rallying today. It's been rallying for the past 4 or 5 days. It is nothing but a dead cat bounce," the editor and publisher of The Gartman Letter said in an interview with "Power Lunch."

Those problems include the increase of oil coming out of countries such as Libya and Nigeria, which are ramping up much more quickly and higher than anticipated, Gartman explained.

He believes prices could rally to $48 or $49 "at best" over the next two to three weeks, but longer term he's convinced crude will remain in a bear market.

"I'll go with the Deputy Crown Prince of Saudi Arabia, Mohammed bin Salman, who has made it abundantly clear that he thinks crude oil over the course of the next 20, 30 years is going to be essentially worthless."

Read more:
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— CNBC's Jackie O'Sullivan and Reuters contributed to this report.

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