China will call crude oil’s next move: Traders

Want to know what will happen to the price of oil? Just watch China.

So advise macro strategist Boris Schlossberg and technical analyst Todd Gordon

China is "the marginal player in the market at this point and they're also the fastest-growing oil market in the world, and so they have a big, big impact on oil demand going forward," Schlossberg, of BK Asset Management, said in a Wednesday interview with CNBC's "Trading Nation."

Read MoreChina heads for record crude buying year

An employee directs a vehicle toward gas pumps at a China Petroleum & Chemical Corp. (Sinopec) gas station in the Zhujiang New Town district of Guangzhou, Guangdong Province, China.
Brent Lewin | Bloomberg | Getty Images
An employee directs a vehicle toward gas pumps at a China Petroleum & Chemical Corp. (Sinopec) gas station in the Zhujiang New Town district of Guangzhou, Guangdong Province, China.

"I think the two data points — Chinese growth and oil prices — may correlate for the next couple of quarters, as the market looks for that to be the key tell as to where the price of oil goes," Schlossberg continued.

Schlossberg's case is supported by the charts, says Gordon. A comparison between the popular (FXI) ETF tracking Chinese stocks and the (USO) ETF tracking oil shows that the two "are almost indistinguishable," the technical analyst said Wednesday.

Both Schlossberg and Gordon see Chinese growth and oil prices diminishing alongside each other.

"I think those halcyon days of 10 percent growth are gone, and therefore I think that uptake in demand for oil pretty much doesn't exist," Schlossberg said.

Translation? Further losses could be ahead for the already-crushed commodity.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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