Could Oil Really Spike to $200 by August?

Heard the talk that oil could spike up to $200 as soon as August? Us too.

As far as we can tell, it was largely triggered by commentary made by Beau Taylor of Taylor Woods Capital at CNBC’s Delivering Alpha conference.

He told us that if there were a “material military escalation (in the Mideast) with no endgame,” he thought oil prices could double. “(In this kind of situation) commodities have a strange ability to go much higher and I suspect that they would,” he said.

Largely Taylor as well as other oil bulls point to rapid developments in the Mideast region which include: 1) the killing of top Syrian security chiefs on Wednesday, and 2) the attack on Israeli tourists in Bulgaria, which Israel accused Iran of carrying out.

Considering the Middle East is the source of more than a quarter of the world's oil, should tensions escalate to the point where Iran blocks the Strait of Hormuz and prevents oil from getting to market – they say oil could hit $200

That’s what they say, anyway.

Esteemed commodities investor Dennis Gartman says something altogether different.

“Nonsense! The argument is illogical, it’s ill-founded and wrong.”

Gartman tells us despite the region's woes, there’s no way prices could double. “There's just too great a supply of oil in the world. Also there are so many new ways to get oil and the prospects of nat gas are so dynamic,” a spike of that magnitude is almost out of the question.

“Sure Brent could go to $115,” he admits. “But it wouldn’t last.”

Unless current events devolve into a massive geo-political circumstance (like a war) Gartman says, “oil trades about where it is or lower – not higher.

Now that’s not to say oil’s current rally will stop dead in its tracks – that’s not the point. “Oh sure, oil could have another $2-$3 dollars to go,” Gartman admits, but that’s it.

Posted by CNBC's Lee Brodie

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Trader disclosure: On July 19, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephanie Link is long AAPL; Stephanie Link is long EBAY; Stephanie Link is long CVS; Stephanie Link is long JPM; Stephanie Link is long STI; Stephanie Link is long MCD; Stephanie Link is long WY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long XLF; Josh Brown is long WMT; Josh Brown is long TGT; Josh Brown is long MCD; Josh Brown is long QCOM; Mike Murphy is long FB; Mike Murphy is long EBAY; Mike Murphy is long TOL; Mike Murphy is long LEN; Mike Murphy is long SWK PUTS; Mike Murphy is long EMC; Mike Murphy is long URI

For Dennis Gartman
Dennis Gartman is long GOLD
Dennis Gartman is long CAD
Dennis Gartman is long AUD/EUR
Dennis Gartman is long HEATING OIL
Dennis Gartman is long S&P 500 INDEX
Dennis Gartman is long WHEAT
Dennis Gartman is long NAT GAS
Dennis Gartman is short EURO
Dennis Gartman is short YEN
Dennis Gartman is short CORN with wires.