Traders still betting on much lower oil

Stephen Schork: Big money bets against crude

The incredible crude collapse continues, as WTI crude oil futures fell as low as $47.55 per barrel on Tuesday afternoon, the lowest level in nearly six years. And energy expert Stephen Schork, editor of the widely read Schork Report, sees no reason for the selloff to end now.

"We're divorced from the economics, from the rig economics, so now fear and greed are in the market. Low prices are becoming the excuse for lower prices," Schork said Tuesday on CNBC's "Futures Now." "Trying to pick a bottom here is akin to the old adage of catching a falling knife. So don't try to pick the bottom, just ride the wave lower."

That's not to say that oil has no reason to slide. Even as oil production remains robust, "we've got really poor economic growth around the world," Schork said. "Japan is in recession, industrial production in China is falling, industrial production in India is falling, Europe is on the precipice of recession."

Read More Not just oil: Are lower commodity prices here to stay?

In addition, fresh concerns about a potential Greek exit from the euro zone are pressuring the euro and helping the U.S. dollar, he pointed out.

"A weak euro, i.e., a strong dollar, is very bearish for crude oil. So this appears to be the smoking gun for the overall weakness."

So how is the big money betting on oil now?

"There's an active, actual market in the 30-puts — that's bets that oil will go below $30 a barrel," he said. Additionally, the 40-strike puts and 45-strike puts on February crude oil have also been heavily traded.

For Schork, the next level of support is at $42.20. "If we can't hold that support, then $32.40, which is the low from that 2009 price implosion, would be your best target."

—By CNBC's Alex Rosenberg.

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