NEW YORK (MarketWatch)—Investors and traders looking for the oil rout to give way to a V-shaped recovery are likely to be painfully disappointed, said a hedge-fund manager who made a killing betting on falling oil prices in 2014.

“I still believe we’re going to go below $40 and you’re going to have a look at the lows. I think it’s going to happen faster now than people think,” said Doug King, the London-based chief investment officer of the Merchant Commodity Fund, in a telephone interview on Friday.

The fund saw a 59.3% return in 2014, driven in large part by bets oil prices would fall. Prices for both West Texas Intermediate, the U.S. benchmark, and Brent, the global benchmark, dropped by more than half from their mid-2014 highs by the end of the year and are down for the year in 2015, as well. King said the fund is up around 8.5% year-to-date.

A February bounce, which saw nearby Brent futures UK:LCOJ5 jump more than 19% while lifting Nymex West Texas Intermediate crude CLJ25, by 3.2%, was stronger than he had anticipated, King acknowledged..

But that bounce faded fast. Nymex WTI crude ended Friday less than $1 away from a six-year low set earlier this year, extending a sharp weekly decline after the International Energy Agency said signs of price stability were a “facade” in the face of rising production.

King, who told Bloomberg in January that oil could test the $30 to $35 a barrel level, is confident in prospects for another push lower.

The second quarter, he noted, is usually the weakest for demand.

Also, oil inventories continue to grow. Now, the big question is how much onshore storage capacity remains in the U.S., where crude inventories are at their highest level in more than 80 years, according to government data. King said there is a danger space could run out, leaving more oil to flood the physical market—a proposition that he expects to be tested in the next four weeks.

And despite falling rig counts, U.S. oil production is still around 1.2 million to 1.3 million barrels a day more than it was this time last year, King estimated.

“I look for facts,” he said. “I look for the reality of production decline, and, today, we’re not seeing it.”

The demand side of the equation doesn’t provide bulls much fodder, either, King said. China’s industrial economy appears to be struggling, while a surging dollar is a “headwind” for the U.S. economy that is also putting the hurt on emerging-market currencies.

Then there are all those stubborn oil bulls. Data shows big speculators are still maintaining significant net long positions—bets that prices will go up—in crude oil, further leaving the market vulnerable to another downswing if they begin a stampede for the exits.

“I look at other commodity markets: the speculator is short Arabica [coffee], the speculator is short natgas futures. And in crude oil, he’s [net long] long 300,000 barrels of WTI alone, and I think, God, just imagine if he went even. It would be a bloodbath,” King said.

Capitulation by those long speculators is one part of a scenario that might finally make way for a bottom, King said. Another positive factor would be monthly and year-over-year U.S. production declines.

That could set the stage for more stable prices as the market heads into peak seasonal refinery runs in the third quarter, he said, but warned against expecting a quick turnaround.

“People who think this will be a V-shape [rebound] and off we go again will be mistaken,” he said.