Will the price of oil ever again top $50 a barrel?

Probably not, according to Dennis Gartman, editor and publisher of The Gartman Letter.

“We have seen the end of the bull market in crude. It’s going to be very difficult for WTI crude oil to maintain much above $50 per barrel for any protracted period of time,” he told the audience at the seventh annual Inside Alternatives investment conference in Denver earlier this week.

Gartman’s pronouncement came during a wide-ranging discussion with Mark Yusko, the founder, CIO and CEO of Morgan Creek Capital Management. The two agreed on much about the future of oil and other commodities, the timing of the next recession and how to survive the coming headwinds.

Oil Sinking

Fracking has not only increased production, it’s made extraction less expensive, said Gartman. And new crude oil supplies are being discovered around the world. In Argentina, for example, recoverable reserves of 4.2 billion barrels were just found. In the well-developed Permian Basin of west Texas, Apache recently discovered another 3 billion barrels of oil.

Increasingly efficient use of oil will also hold down prices.

“We view oil with a lot of circumspection as well. Saudi Arabia made a huge mistake in November of 2014 when they didn’t cut production,” Yusko said. “There will be excess supplies.”

Gartman said the Saudis are likely to pump oil aggressively because they have a “wasting asset” that will be worth less in the future.

The Saudis have about a two-decade window before renewable energy sources make oil significantly less valuable. “Twenty years from now, we won’t be talking about oil. We’ll all be driving EVs [electric vehicles] and autonomous vehicles,” said Yusko.

Commodities Rising

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