Renowned energy trader Mark Fisher on Wednesday said the "worst is over" for the crude oil market following a six-week rout that has seen U.S. crude lose over a quarter of its value.
The MBF Clearing founder and CEO said he'd be a buyer right now rather than a seller.
The market outlook for crude oil has recently flipped. Investors were worried about a shortage of oil as U.S. sanctions shrank Iran's crude exports. But the market now expects supply to outstrip demand as the outlook for consumption growth weakens and Washington allows some Iranian crude shipments to continue.
However, Fisher theorized that much of the drop in oil prices is due to macro funds getting out of the crude trade and rotating into natural gas futures. He argued that for years, buying oil and selling natural gas has been a huge winner.
"In no short period of time this trade has imploded," he said. "And I'm sure there is a ton of people getting, you know, margin called out of this trade, where they're being forced to buy nat gas and sell crude oil, and that's added to this ... new debacle."
"The worst is over on the crude oil side. In nat gas, it's anyone's guess what could happen," Fisher said in an interview with CNBC's "Squawk Box."
Natural gas has surged nearly 60 percent over the last two months as colder-than-anticipated weather descends on much of the United States. That is fueling demand for heating at a time when the country is entering winter with the lowest levels of natural gas in storage in over a decade.
On Wednesday, natural gas surged to $4.929 per million British thermal unit, its highest level since February 2014. The contract was last trading more than 7 percent higher at $4.395 per mmBtu.
Fisher predicted in the summer of 2017 that investors would see a streak of unseasonably warm winters break in the next year or two, and that natural gas prices would shoot to $4 or $5 per mmBtu.
"I don't know how cold the winter is going to be, but the fear of a cold winter — and the winter hasn't even really start yet — is driving nat gas prices," Fisher said. "Obviously if it was later in the winter, there would be less fear because there would be less of a winter left."
Oil prices were higher Wednesday, recovering from a record 12-day losing streak for U.S. crude and a 7-percent plunge on Tuesday alone. The prospect that OPEC and allied producers will agree to cut output at a meeting next month is pushing oil prices higher.
U.S. West Texas Intermediate (WTI) crude oil futures were up 64 cents, or 1.2 percent, at $56.33 per barrel at 9:40 a.m. ET. International benchmark Brent crude oil futures were up $1.11, or 1.7 percent, at $66.58 per barrel.
Record crude production from the United States and Russia and signals that output from several other nations will grow more quickly than expected in 2019 have pressured oil prices in recent weeks.
— Reuters contributed to this report.