Despite today's less-than-stellar global economic environment, as recently as April, crude was trading well over $100 a barrel.

After a 4-day losing streak, on October 23 crude oil futures fell as low as $85.69 a barrel -- the lowest price since July.

Predictably, the mainstream energy market observers have blamed the drop on "global economic worries." Of course, we have pointed out before how, on one recent occasion, oil fell in the face of positive economic expectations. And on another recent occasion, oil fell despite the absence of any real news, period.

So, the mainstream analysts have to do better than "global economic worries" to explain the latest oil selloff...except that they can't.

See, in the world of "fundamental" analysis, markets always react to something. If it's not A, then it's B; and if not B, then it's C. "Action" outside the markets produces a "reaction" inside them. So it's simply inconceivable for a conventional analyst to suggest anything other than an outside factor -- the handy "global economic worries," in this case -- to pin the October 23 selloff on.

Fine...except, doesn't every day now bring some "concern about global economic growth"?

Europe has been dealing with the debt crisis for several years now; China's economy has been cooling off; and right here in the U.S. -- well, every month it's been hit and miss with various economic indicators, from unemployment to manufacturing to consumer confidence.

One could argue that in this environment, oil prices should be half of what they are today. But they aren't. In fact, as recently as April, crude was trading well over $100 a barrel.

When it's all said and done, you have to accept the fact: To get serious about forecasting the future trend in crude, you have to consider something other than the proverbial "fundamentals." Elliott wave analysis offers a real alternative.

By studying price charts, wave analysis tracks and measures the changes in the market's collective psychology. After all, what moves market prices but the market participants? If you can forecast their bias, bullish or bearish, you can reasonably forecast the market. And right now can you see how EWI Founder and President Robert Prechter views the common argument over "peak oil" -- free. See below for details.

Free Oil Report from Robert Prechter

In July 2008, when crude oil prices were at $148 a barrel and "peak oil" bulls were forecasting a rise to $200, even $300 a barrel, contrarian technical analyst Robert Prechter took the opposite stance: "One of the greatest commodity tops of all time is due very soon." Six months later, a barrel of oil cost just $32. Now, you can read Prechter's big-picture outlook on the oil markets in a newly released report.

Follow this link to download Prechter's 26-page oil report now -- it's free >>

This article was syndicated by Elliott Wave International and was originally published under the headline Crude Oil Falls to a 3-Month Low: Why Blaming "Soft Economy" Isn't the Answer. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.