Oil and Gas

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You can explain most of the gyrations in oil this year by the U.S. dollar, not the swings in fundamentals, Adam Longson, Morgan Stanley head of energy commodity research, said on CNBC's "Power Lunch" on Tuesday.

"The difference between $35 oil and $55 oil is essentially the U.S. dollar," he said. "You can see it if you plot it on a chart, if you looked at Brent and the trade-weighted dollar together since last March, they're effectively the same line."

While many market watchers may be eyeing oil to know where the stocks are going, Longson suggests that investors look at the dollar.

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"Does the over supply matter? absolutely," Longson said. "Changes in fundamentals in an oversupplied market don't drive changes in price, it's much more about other factors when you get into that world."

As analysts continue to debate the bottom for oil, Morgan Stanley's Longson argues that while this isn't the firm's base case, oil could dip to the $20s. The firm forecasts that in a scenario where the Chinese yuan is devalued at a rapid rate, it can ripple into other currencies, driving the dollar higher and the commodity lower.

"If China devalues 15 percent, that as a basket would move the dollar about 3 percent. Oil's moved about 3 to 4 times whatever the dollar has moved," he said. "That right there would put you in the mid to high 20s, but it you got something larger ... then you're talking about $20 oil."