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Famed oil bear loses his growl

Oil expert Stephen Schork has nailed the call on crude all year. He forecast further losses during many developments and labeled a February surge a "dead cat bounce" that would soon fade and allow for oil to eventually fall below $40.

But now, the editor of the widely read "Schork Report" newsletter is changing his tune.

Read MoreGartman: It was a mistake to go bullish on oil

"I did move to neutral from a bearish position in my short term daily buys because of the amount of volatility in the market place that we've seen this past week," Schork said Friday on CNBC's "Trading Nation."

"Look, oil does not belong below $40 a barrel," Schork said. U.S. crude recovered a bit and was trading at $44 on Monday.

Read More Oil prices fall on profit-taking, rate hike uncertainty

On one hand, since prices are already "disconnected from reality," there's no reason to believe that they can't possible fall yet lower, perhaps down as far as the $32.40 per barrel seen in the financial crisis, Schork said.

But on the other, the supply and demand picture really ought to bring oil prices higher over the slightly longer-term.

"Twelve months out, we will start to see the pullback in production. Assuming China is not in recession and hasn't pulled the rest of the globe down into recession and we do have economic growth, we could certainly make a case for oil in that $55 to $65 range. I don't think oil is sustainable above that level, but I think the producer can make a living at that $55/$60/$65 area and I think economies can continue to grow at that level. I think that is a fair value," Schork said.

In addition to shifting his forecast, Schork is moving to neutral in his own trading portfolio, declining to re-short oil after exiting his positions (via an automatic, loss-mitigating "stop" order) last week.

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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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