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Dennis Gartman returns to a bearish stance on oil

  • Gartman said last month crude oil looked bullish, but now it looks bearish.
  • The chance that crude oil could rally is limited unless something major happens, Gartman said.
  • Gartman doubts "very seriously" that WTI crude can reach much more than $55.

Commodities King Dennis Gartman is bearish on crude oil again.

Last month, he told CNBC crude oil could hit $55 a barrel. On Monday, he backed away from that notion.

"All things being otherwise equal, if things remain as they are right now, crude oil probably wants to continue to trend downward," he said. "I watch the term structures and the term structures had turned about a month and a half ago pretty bullishly, but in the course of the last week they've actually begun to turn bearishly once again."

WTI crude prices have slid, and Gartman said the fundamentals argue for lower prices. The chance that crude oil could rally is limited unless something happens politically, in Nigeria or Saudi Arabia, or the Iran nuclear deal is decertified, he said.

Even if the U.S. terminated the Iran deal, the oil market would receive only a temporary boost, Gartman said.

"If that were to occur, you'd probably get a $3, $4, $5 dollar rally for crude oil," he said. "But let's remember that crude oil is fungible. Are the Iranians not going to sell crude oil? Will they not be able to move it to somebody else? Of course that's what's going to happen."

As to whether WTI crude can reach much more than $55, Gartman said he doubts that "very seriously."