Print out page 1 from the weekly chart at http://futures.tradingcharts.com/chart/CO/W
Then, draw a line connecting the peaks, and another connecting the valleys.  You will see that the current decline in light, sweet oil has just dropped below the lower support line.  

The chart covers the past two years, but the trend goes back three years this month, as can be seen on the monthly chart. Hedge funds make money by identifying and riding trends; one can imagine this chart etched in granite (or gold) in their conference rooms. My guess is that they are now buying to close short positions, and buying more to open long ones.

The center of the upper and lower bands is the fundamental price trend line, around $74/b now.  This line expresses the fundamentals of supply and demand, reflecting a constant supply and growing numbers of rich people, not least Asian.  What else can the line do but climb? The line has been extremely steady, completely ignoring geopolitical risks, fear premiums, etc.  Hedge funds can affect the oscillation around the fundamental price, but do not have any affect on the price line itself.  

I think the decreasing volatility expresses the market's grwoing acceptance of the overall trend and its growing ability to ignore extraneous events and focus on fundamental supply and demand.  World supply has been nearly flat since late 2004, while the demand from asia, the US, and the booming oil exporting nations themselves has been strong.  The resulting steady increase in price is the mechanism that encourages poor consumers to get off the bus so a growing number of rich can fill up their suv's.

IMO, the trend will change when fundamentals change; the world gets more supply (or less), rich countries go into recession, bird flu.  You'll know it when you see it.