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Invesco: Oil's well. Eventually

Operating oil drill during oil and gas exploration.
Keith Wood | Getty Images

Oil prices plunged to a new, 12 year low on Monday, as slowing growth in China spooked investors' hopes for demand in 2016.

U.S.West Texas intermediate crude dropped to $1.94 at $31.22 per barrel while Brent crude futures fell by $2.16 a barrel, the lowest level since April, 2004.

So If oil's free-fall continues, how should investors trade it?

"Given bloated storage levels in the United States and other parts of the globe, the next few months are going to be challenging for oil prices," Invesco's Scott Roberts told CNBC's "Power Lunch" Monday. "We will have a more optimistic view on the price of oil starting this Spring. "

Roberts expects refineries will be running at full capacity around that time, to produce gasoline, diesel and jet fuel.

"This increased demand, coupled with declining domestic production, will likely help exert upward pressure on oil prices," said Roberts.

Roberts also expects a "massive under-spend" in oil production capex is underway and will have huge ramifications for oil prices, going forward.

"Since 2013, global spending peaked at $700 billion in the hunt to find and develop new oil sources," said Roberts. Last year, that number dropped to $450 billion, and we expect an even lower number this year. A key reason why oil prices will recover by the third quarter of 2016."

As for the China factor, Roberts believes that if the construction of new airports, rails and skyscrapers winds down, base metals will continue to feel the pinch long before oil ever will.

"For now, oil is the cheapest transportation fuel of the world," said Roberts. "And population growth will drive increases even further. Overall, expect a recovery in oil prices as 2016 progresses."

In the energy high yield space, Roberts' top picks right now are Diamondback Energy, Concho Resources and RSP Periman.

Roberts is co-manager of the Invesco High Yield Income Fund, and oversees $3 billion in assets under management. The fund has a five year total return of over 4.36 percent.