Default next move for oil is downwards, and here's why

AS traders, investors and pundits, we all like to think that what we do is akin to a science. We believe that by working harder and being smarter we can give ourselves an edge, that enough research will reveal to us the next move, either a long-term trend or an intraday blip on a chart, and that we can profit from that knowledge. Usually, especially over longer time spans, we are correct in that assumption. Sometimes, however, no amount of fundamental or technical analysis will help.

Over the last week or so we have seen some violent swings in the price of oil, swings that in many ways defy logic. At times like these we have to rely on the art, rather than science, of trading and reading markets.

That is not to say that traders and investors at home should be simply making wild guesses; it is just that right now, the oil markets are trading on factors other than the fundamental influences that we are used to. It is hard to chart fear and panic.