Futures Now

Why China marks a 'turning point' for oil: JPMorgan

A turning point for oil?

Crude oil fell more than 4 percent Tuesday and closed at a six-year low after China shocked the markets by devaluing its currency. But as many investors fear that the move will put more downward pressure on the already beaten commodity, one noted economist said it could mark a "very exciting" buying opportunity.

"I think if the Chinese are successful to stimulate their economy, we are going to eventually see oil prices push back up," Anthony Chan said Tuesday on CNBC's "Futures Now." China is the world's second-largest oil consumer. "I think it [could be] a turning point for oil."

According to Chan, now that the Chinese government has opened the door to depreciation, there is the possibility of further easing. "They've already lowered interest rates several times, lowered reserve requirements several times. I think they could do it again," said Chan, chief economist JPMorgan Chase's private client group. Chan noted that more recently China has been "toying" with fiscal policy in order to help the country's infrastructure. "All these things will eventually lead to an increase in oil."

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But investors shouldn't jump in and buy just yet, as Chan admits that oil's 55 percent drop in the past year coupled with mounting uncertainty over supply and demand makes it difficult to pick a bottom in the short-term.

"I think [crude] could very well go a little bit lower as we continue to see spikes in the dollar and people worry over supply in Iran," he said. "We are looking somewhere in the neighborhood of six to 12 months from now for oil to definitely be higher."

To be sure, there are those on Wall Street who think the oil slide could intensify. Again Capital's John Kilduff told CNBC he expects crude to fall as low as $30 a barrel.

For Chan, there is light at the end of the tunnel. As he sees oil ending the year at $55 a barrel, more than 25 percent higher than Tuesday's closing price of $43.06.