Crude Oil At 6-Year Lows, Oppenheimer Analyst Feels Circulated Reasons Are 'Exaggeration'

After having a decent run in the last few weeks, oil is slumping heavily again. Breaking the $44 a barrel (bbl) mark Monday, WTI Crude now trades at its six-year low. Fadel Gheit, senior energy analyst at Oppenheimer, was on CNBC Monday to share his outlook on oil and to discuss what would likely bring down the price of gasoline.

Storage Claims Are Exaggerations

"It's all again an exaggeration. Yes, we are close to being full in terms of storage, but again that does not justify the crash in crude oil price," Gheit said.

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"This is a temporary effect that will definitely depress crude oil price within the next couple of months, but people are exaggerating this move. Some of the bet here is that we are going to see crude oil prices below $30, which I do not believe is more likely."

Bad For Long-Term Investors

When it was highlighted that some heavyweights are of the opinion that oil could go lower from here, Gheit said, "But unfortunately, some of the heavyweights that – without mentioning names – these are the people who were betting on $200 oil in 2008. So, two wrongs don't make right. I mean, it's exaggeration. It's obviously music to the ears of the hedge funds and traders, but it's bad for people who are investing longer-term."

According to Gheit, if President Obama removes the Nixon-era ban on exporting oil, then "it will definitely bring gasoline prices much lower, because gasoline prices are basically determined by Brent Crude, not by our benchmark crude."