The hot commodities trade had cooled Monday morning on news of an interest rate hike out of China. China’s central bank raised the one-year Yuan lending rate by 0.25 percentage points on Saturday in another attempt to slow inflation, which hit a 28-month high of 5.1% in November. Investor bets that China’s latest effort to reign in prices would prove successful sent futures for agricultural products and crude lower Monday.
Commodities investor and Fast Money Contributor Dennis Gartman was betting that the sell-off was a knee-jerk reaction and wouldn’t last, particularly for crude .
Gartman believes crude is set to skyrocket and that the case for higher oil is much stronger than China’s ability to pressure prices. “Oil is not going down very far,” said Gartman, author of the renowned Gartman Letter.
Gartman highlighted supply chain threats from the bombings in Nigeria as evidence that oil would rise. Three of Nigeria’s four state-owned refineries were shut down after a pipeline attack earlier this month. Deadly bombings on Christmas Eve had intensified violence in the country, leading to riots Monday morning.
While Gartman watched the geo-political risk to crude, Virtus’ Joe Terranova was focusing on the rumors surrounding a coming Microsoft Windows tablet that would use chips made by ARM Holdings . Analysts expect Microsoft to announce that it has adapted its Windows operating system for tablet use during the Consumer Electronics Show, which begins on Jan. 6 in Las Vegas.
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CNBC.com with wires.