Legendary oil trader Andy Hall says crude prices have likely hit a bottom after plunging more than 30 percent over the last two months.
"I think with prices hovering around or a little over $50 a barrel, I think you would have to have a pretty negative outlook on the global economy to believe that prices will continue their downward trajectory," he said in an interview Thursday on Bloomberg TV.
"So I think on balance, if you want to place a bet on oil right now, you're probably better off betting on it going up than going down."
The former oil trader for Citi is famed for predicting a bull market for crude, a feat that earned him a $100 million payout at the investment bank. Some of the shine has come off Hall's reputation since the man once deemed an oil "god" closed his hedge fund, Astenbeck Capital Management, following hefty losses on crude bets last year.
Today, Hall still trades oil with his own money and serves as an advisory board member to Orbital Insight, a company that uses satellite information to provide real-time data on crude and fuel stockpiles.
Hall says he's not expecting a global recession. In the absence of a worldwide slowdown, a correction like the one gripping the oil market today tends to temper supply growth and stimulate demand for fuel.
For Hall, the impact of OPEC's recently announced production cuts is "the $64,000 question," but it's only one piece of the puzzle. The oil market is also grappling with headwinds for fuel demand, concerns about a looming U.S.-China trade war and U.S. dollar strength that tends to weigh on crude prices, according to Hall.
"On the other hand, not only have you had OPEC cut production, there's no question that lower prices will have an impact on production growth here in the U.S.," Hall said.
That said, Hall believes the growth in U.S. shale oil output has been the biggest surprise this year.
"Right now, year-over-year growth in crude production here in the U.S. is about 2 million barrels a day. Back in January, the government's EIA was forecasting growth of half a million barrels a day, so that's a staggering difference," he said.