Crude oil surged 7 percent on Tuesday, taking the commodity more than $10 per barrel above the multiyear lows hit last week. But oil expert Stephen Schork believes that the incredible plunging commodity hasn't bottomed just yet.
"I do think this is a dead cat bounce," the editor of the widely read Schork Report said Tuesday on CNBC's "Futures Now." "I do expect another leg lower."
He said oil prices have been supported by the United Steelworks strike at oil products refineries, which has the potential to tamp down American energy production, and thus is bullish for oil products. Schork argues that oil has rallied in sympathy with the fundamentally sound bounce in gasoline and other products, but that the story is actually quite bearish for crude, as "1.6 million barrels a day of crude oil demand has just gone missing from the market."
"The bottom line here is, we do not have enough demand, and the demand is going to be weak for the next two to three months, and we have too much supply," he said.
Overall, Schork predicts that "we see sub-$40 oil before we see plus-$60 oil," a bold call given that oil futures traded above $54 at one point on Tuesday.
But just because he's bearish, that doesn't mean Schork advises going short.
"I wouldn't want to sell into this right now, because we go back to John Maynard Keynes: 'Markets can remain illogical longer than we can remain solvent,'" he said, citing a oft-quoted (and perhaps apocryphal) maxim attributed to the British economist.
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