The world isn't running out of oil, but out of cheap oil. Therefore the fundamentals don't support oil trading in the $60s. As oil prices have plunged from over $100 to just over $60 a barrel, it appears to us the market is driven by a combination of the following:

• The global economy is experiencing a severe slowdown; • Major liquidity providers have left the market; and/or • Technicals rather than fundamentals are in charge

Europe can't get back on its feet with sanctions imposed on Russia (hint to European Central Bank head Draghi: printing money can't fix this). China's economy is in transition with significant headwinds coming from a housing bubble that's deflating. In the U.S., we are made to believe our recovery is getting ever stronger; the energy markets appear to disagree.

The large moves we have seen in some markets of late – most notably in oil futures – may well also be a reflection that banks are no longer "risk takers" in these markets; the law of unintended consequences has removed these very large liquidity providers. Investors shouldn't be surprised that moves have become more volatile.

The media attributes the drastic drop in oil prices to OPEC's decision not to limit production. OPEC's meeting last week might have been a catalyst, but fundamentals did not change radically enough to justify the dramatic decline. Some say commodity prices tend to be driven more by technicals, and we don't disagree. We take it a step further, though, arguing all markets are ever more removed from fundamentals.