Crude oil is one of the most liquid commodities within the market, which means that it can be traded in large volumes and there is extensive data to analyse. In order to fully understand the oil market and be able to make future predictions, traders are required to perform some research of their own, including technical and fundamental analysis. This will give an insight into market trends and also help to build knowledge of the asset itself.
For example, fundamental analysis is useful in evaluating the value of oil, through company financial statements, oil trading news releases and the general economic stability of a region that you are trading in. For example, if there is a news announcement of an oil spill or cut in production, this will affect the price of oil and its trading companies, which will need to be factored into your trading strategy. This is considered fundamental analysis.
Studying price charts, graphs and technical indicators to extract numerical information is all part of technical analysis, which usually is the second stage of the process. However, both strategies are needed for oil trading, as the commodity can be highly volatile and therefore it benefits to use a comprehensive perspective.