Oil: A High-Risk Market

"From a trading perspective, this market is as risky as it has been in about two years, which means you can lose money in a hurry, and that's for professionals," Dietz said. "For casual or periodic traders, I would advise against entering this market. A person could always get lucky once or twice, but saying they could replicate that longer-term is not likely."

Dietz said both oil bulls and bears "expect a two or three week fight" before a direction bias resumes for the oil market.

The oil bulls say the prospect of increased tensions with Iran as its nuclear program progresses, plus ongoing civil unrest in Nigeria and continual concerns about Venezuela's production under socialist President Hugo Chavez, all threaten to erode the world's small supply cushion, also known as the safety cushion.

Conversely, oil bears point to the United States -- the world's largest energy user -- whose energy consumption declined at the end of 2007, and talk of slowing oil consumption growth in rapid GDP growth countries China and India, among others, on conservation, as well as contracting manufacturing, due to a slowing global economy.

What's Dietz stance? Flat. "The best stance is to sit back and let the oil world pass by, let the oil market sort itself out," Dietz said. "We have a saying in the oil market when the data says the market is divided that goes 'don't just do something, stand there.' That's how things are right now."

Oil Analysis: Food for thought, for those investors thinking about dabbling in USO or other oil futures-oriented plays: stand aside. Given the tug-of-war in oil, discretion is the better part of valor, and in not losing your shirt.