Dennis Gartman: Tapping SPR Could Drive Oil to New Highs

Even during the worst market swings Dennis Gartman keeps his cool. But he’s hot under the collar about this.

With oil prices at 3-month highs, published reportssuggest that the White House has "dusted off" plans for potentially tapping the Strategic Petroleum Reserve (SPR).

Although market rumor suggested the move may be political -- an effort to keep prices at the pump under control into the election -- a source with knowledge of the discussions said a release would be intended to prevent rising energy prices from undermining sanctions against Iran. Read More:"U.S. Faces Stiff Opposition to Emergency Oil Release Plans."

But esteemed commodities trader Dennis Gartman doesn’t care about politics – he cares about profits – and he says tapping the SPR could have an unexpected consequence.

Because the SPR was only intended to be used in emergency situations if the administration releases reserves in the current market environment, Gartman doesn’t think it will have the same impact.

“Yes, in the very near term oil prices will fall, he says, but we’re not in a distressed market as would be the case after an attack or natural disaster. There's no serious issue.

“Therefore, the market will quickly come to expect the oil to be repurchased and replaced. And if a big buyer steps into the market in the form of the US government, speculators could drive oil to new highs.”

The executive director of the International Energy Agency, Maria van der Hoeven seems to share Gartman’s perspective. "There is no reason for a release," she said.

The IEA "bases our actions on data and reality. The market is sufficiently supplied," she told reporters after a speech in Houston.

"If the objective is giving people relief, this isn't the way to do it," says Gartman. "It will only make matter worse. I really hope they think about that."

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Posted by CNBC's Lee Brodie

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Trader disclosure: On August 17, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long AAPL CALL SPREADS; Jon Najarian is long CPN CALL SPREADS; Jon Najarian is long CSCO CALL SPREADS; Jon Najarian is long GLD CALL SPREADS; Jon Najarian is long NLFX CALL SPREADS; Jon Najarian is long NRG CALL SPREADS; Jon Najarian is long STLD CALL SPREADS; Jon Najarian is long YHOO CALL SPREADS; Jon Najarian is long VIX CALL SPREADS; Jon Najarian is long STSI; Jon Najarian is long CBOE; Jon Najarian is long CME; Jon Najarian is long GLUU; Pete Najarian is long AAPL CALLS; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Steven Weiss is long DE; Steven Weiss is long TCK; Steven Weiss is long AAPL; Steven Weiss is long QCOM; Steven Weiss is long HAIN; Steven Weiss is long HK; Steven Weiss is long TBT; Josh Brown is long AAPL; Josh Brown is long WFC; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long WMT; Josh Brown is long TGT; Josh Brown is long SBUX; Josh Brown is long GPS

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