Crude fell to the lowest point since January as another turbulent week took its toll on oil prices, with thin trading and unclear supply and demand data fueling a 30% fall off this year’s highs.

US benchmark West Texas Intermediate has dropped roughly $35 per barrel since it hit its peak of $122 per barrel three months back. On Friday it closed at $86.79. European benchmark Brent crude closed at $92.84.

Traders have noted the primary problem driving prices down is uncertainty over supply and demand, as China ricochets from reopening back to lockdown, the quantity of Russian crude to wend its way to market proves difficult to calculate, and a pending Iranian nuclear deal looks set the flood the market with Iranian crude, if the the deal happens, which gets hazier by the day.

On top of that the Biden administration appears as if it might dip again into the Strategic Reserve, though strong political headwinds are leaning against it. Meanwhile in Europe, uncertainty remains as to what degree Europe will see demand destruction due to unaffordable energy prices rising higher going into this winter, as traders try to calculate to what degree nations will be able to switch consumption from increasingly tight supplies of natural gas to oil. And then there is OPEC+, which can tighten or loosen the market with a single decision, and send the price moving with a mere statement.

In a recent note, Bank of America securities analysts made opposing cases for oil both rising and falling by as much as $20 throughout the next few months. The note concluded, “There is simply too much uncertainty around fundamentals going into the winter.”

This unpredictability, and the volatility it produces has sent traders out of the markets. A measure of trading activity, open interest, has landed at about half of its measure five years ago in the most active US oil futures contract, and 30% of its reading last year.

That reduction in liquidity means carrying out transactions can suddenly trigger big moves in prices which disorder trading, as the markets were already seeing wild swings due to thin trading volumes.

Bernard Drury, chief executive of Drury Capital Inc., a commodities-trading firm noted that speculators like him are not taking nearly as many positions in the futures market, between the fact oil is now twice as expensive as it had been, and all of the risk produced by the volatility threatens every move. He said, “We’ll trade maybe a third of the number of contracts we traded a couple of years ago and still get the same kind of risk exposure. If everyone on the speculative side of things is acting like us, they might be participating more or less fully, but they’re trading fewer contracts.”

As speculators pull back, it becomes harder for the businesses which produce, transport, and consume oil to find counterparties in trades to reduce their own risk.

Traders have adapted to this by splitting trades up into smaller transactions, to hide their moves and avoid roiling the thin markets, according to Shankar Narayanan, head of research at Quantitative Brokers LLC. His firm uses algorithms to trade on behalf of hedge funds, banks and asset managers.

Mr. Narayanan noted that quote-size has shrunk by roughly 50% from one year ago, and has dropped 70% over the last three years. The has produced wider spreads between offers to buy and to sell. These bigger spreads have increased volatility and reduced liquidity by over 50% since 2019.

He went on, “Oil prices have been scraping the skies since February but on a very poor foundation of liquidity. The price is not sustainable.”

Now, according to Peak Trading Research, hedge funds and trading algorithms that follow price trends throughout the speculative side of the oil market have all been lining up behind short bets for the past two weeks.

The Swiss company’s own mathematical model turned out a perfect bearish score this last week for the first time since the Omicron variant spooked the markets in late 2021. Two weeks before that, the model registered a perfect bullish score, indicating a strong shift in the underlying variables, which indicates everyone was positioned for rising oil prices, before all shifting course together and betting on oil dropping.

Dave Whitcomb, who presides over Peak’s operation said, “Big hedge funds have been layering on shorts, and they’re now playing for lower prices. This is a definitive sign that the bull market is over. You can stick a fork in it.”

At an energy conference this past week, CEO of rig-owner Patterson-UTI Energy Inc., Andy Hendricks, said said to investors that the whipsawing prices for crude have not impacted the demand for his company’s drilling equipment among its customers.

He noted, “None of them were really planning on $110 oil; I mean, that was just bonus for them. The volatility has not changed the discussions at all in the U.S. for our services.”