Oil supplies in the U.S. are at almost 20 year highs, heating oil supplies are near 25 year highs and consumers are really watching their budgets right now, "so we think oil in the 70s right now is quite overpriced," said James Cordier, founder of Optionsellers.com.
“We think that the consumer is going to have a very hard time supporting the $3-$3.50 gasoline that seems almost impossible to us,” Cordier told CNBC.
Cordier said oil should be trading between $50 to $55.
“The fact that we’re trading in the 70s… at above fair value right now, that will be rectified very soon,” he said.
“The U.S. is still by far the largest consumer of oil and we certainly don’t have the extra money right now to push prices to higher levels.”
Expect oil to find its fair value once the stock market finally enters a correction, said Cordier.
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No immediate information was available for Cordier or his firm.
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