Crude Oil Price: Can you bet on Crude Oil Futures NOW?

OK, so you've been an active trader who has been trading on Crude Oil Futures and have enjoyed a handsome profit from your Crude Oil Futures Trading given the huge volatility we've seen over the past few months. The Crude oil prices have shot from $70 per barrel to almost $150 per barrel and now they are back to the lowest prices in last 4 years and have touched to bottoms of $45 per barrel. The million dollar question to ask is, where are the oil prices headed? Are Oil Prices going to shoot up further or are they going to test new bottoms or are they going to remain range bound and if yes then within what range?

The so called market experts keep making their forecasts - The genius at Goldman Sachs who predicted that oil prices will go to touch $200 per barrel has been proved correct, but only partially, beacuse the oil prices did touch around $147 and then started to downwards trend and are now staying at the $45 levels. So, can you trust any other similar genius?

Then comes the circus of the economic cycle - the so called market experts trading oil and oil futures, are telling an inverse relationship between the health of the US economy and the oil prices. According to them, the oil prices and the premium/discounts of Crude Oil futures are invesrly related. If the US economy is healthy, then the crude oil prices will be high, and when the US economy is weak, then the Crude oil prices and the premium/discounts on the Crude Oil Futures will be low/high. Can you trust them and can you take a position is the oil futures for a short term view?

Then, the latest report from Merrill Lynch about the future prediction of oil prices is completely different from these predictions. Merrill Lynch warned that oil prices could fall as low as $25 a barrel next year if the recession affecting the US, Europe and Japan extended to China, the main driver of demand growth in commodity markets in recent years. India too is a major consumer of oil and their high pace growth story will get affected, given the huge dependency they have on overseas countries especially for offshoring and other exports. Merrill's warning came as oil prices sank below the $44 a barrel on Thursday, the lowest level in almost four years, in spite of dramatic interest rates cuts in the UK, Europe and Sweden.

Related: How Crude oil prices are determined?

Now, if you look closely at all these factors, what can you conclude? Still, the dilemma continues on where are the oil prices headed. Are the oil prices going to hit the high side and the crude oil futures trading turn into huge premium, or will the oil futures get into heavy discounts if the oil price fall? Nobody is certain - the oil traders and oil market makers are making hay when the sun shines. Individual investors are advised to stay away from these risky businesses, especially trading crude oil futures or crude oil options, where you never know which way the oil prices are going to go. Instead, invest for long term in Alternative Energy Mutual Funds as mentioned in this article. We also discuss which sub-sectors within the Alternative energy segments have performed better than the rest in the article Alternative Energy Sub Sector recent performance