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Crude oil hasn’t bottomed yet, traders say

Oil has not bottomed: Trader
Oil has not bottomed: Trader

Crude oil may have found its way off of the multiyear low it hit on Tuesday. But according to two traders, bearish dynamics on the supply and demand sides mean it's too early to call the bottom just yet.

"There are so many factors in the equation that are putting downward pressure," on crude oil, Brian Stutland said Thursday on CNBC's "Futures Now. "In the U.S., our oil drums are almost starting to fill up and hit max capacity. You have the Saudis now saying they're going to lower prices in the United States. You have weaker demand in China. And on top of that, a stronger dollar, and crude oil trades in U.S. dollars."

Read More U.S. crude settles above $77 after hitting 3-year low

"I think you have to be careful trying to buy bottoms here on such a volatile asset class right now," Stutland concluded.

In fact, he favors making a bearish play on oil futures. Specifically, he advocates selling December crude oil futures at $77.50 per barrel, with a target of $74.50.

"We are just pumping more oil out of the shale plays here in the United States than you can imagine, and that is really putting pressure on oil," Scott Nations agreed. "$75, $74.50 is completely doable."

Oil traders on the floor of the New York Mercantile Exchange.
Getty Images

On the other hand, billionaire oil CEO Harold Hamm has taken off oil hedges for his Continental Resources, saying on Thursday that crude has found its bottom.

Read More Drilling chief calls bottom on U.S. oil

"We feel like we're at the bottom run here on oil prices… I see prices improving to the $85 to $90 range" in the "short-term," Hamm said on an investor call.

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