Oil "Well Overpriced" and Will Keep Falling; Gasoline to Follow

fter rallying nearly 50% this year, crude prices hit a major speed bump this week as the dollar has firmed up and inventories have risen.

Oil prices were "well overpriced" in the $70s and will continue to weaken in the weeks and months ahead, says James Cordier, President of Liberty Trading Group and co-author of The Complete Guide to Option Selling.

Rather than increased demand, the recent rally was based mainly on speculative demand driven by government stimulus packages, Cordier says. Most notably, a flood of liquidity in China found its way into commodities and China's economy now "looks like a bubble," he says, joining a growing chorus. (video)