OPEC has kept oil markets on a roller coaster — and that's not likely to change

Oil traders hung on OPEC's every word in 2016, and this year the market could be in for more of the same.

After a year of proposed deals, debated deals, and failed deals to reverse two years of low oil prices, OPEC finally put to rest the market's constant speculation by vowing this week to cut production . But the market still has plenty to worry over.

Perhaps the chief concern is whether OPEC can cut production enough to balance a global market awash in more oil than it needs, while still preventing prices from rising so high that sidelined U.S. producers to start pumping again.

Just one day after the decision, International Energy Agency chief Fatih Birol told a conference that OPEC's decision could indeed embolden U.S. drillers. He warned that the oil market is entering a period of greater price fluctuations.

However, there is some evidence that crude's rally since the decision was announced will not immediately soar into the danger zone.

Since 1998, OPEC has cut production 15 times. A week later, U.S. crude (New York Mercantile Exchange: @CL.1) rose 60 percent of the time, with an average return of 1.6 percent, according to analytics tool Kensho. Brent crude (Intercontinental Exchange Europe: @LCO.1) traded positively 75 percent of the time, with an average gain of 1.8 percent. (There are only 12 occurrences recorded for Brent.)

But a month after cuts, U.S. crude was down 53 percent of the time. The average loss was 1.38 percent. Brent was up 67 percent of the time, but only put up an average gain of 0.16 percent.

Market watchers also wonder whether oil producers will stick to the quotas they agreed to this week. OPEC will also decide whether to extend the cuts halfway through 2017, raising the prospect of further volatility as that decision nears.

If 2016 proved anything, it was the power of the cartel to move the market — even as experts repeatedly questioned its continuing relevance.

CNBC looked at 11 of the biggest OPEC events and announcements. On average, the price of U.S. crude rose or fell 4.2 percent the following day, indicating a high degree of volatility.

Amid those major announcements, oil traders had to contend with a flurry of pronouncements from OPEC, as well as from Russian officials. Even an expression of optimism that a deal would get done had the ability to reverse daily losses.

"We came to refer to it as verbal intervention," said John Kilduff, founding partner at energy hedge fund Again Capital.

Traders like Kilduff were keenly aware oil ministers might simply be jawboning the market to put a floor under oil prices. But it was impossible to ignore the latest pronouncements, Kilduff said. OPEC may look like the boy crying wolf, but any one of its missives might have been the real deal — and come back to bite those who hadn't adjusted their positions.

"You kind of had no choice, mostly due to the fact that it was really the Saudis leading the charge," he said. "In the bond market, they say don't fight the Fed. In the oil market, you have to remember not to fight the Saudis."

Saudi Arabia is the world's top oil exporter and OPEC's de facto boss.

CBOE Crude Oil Volatility Index: Dec. 2011 to Dec. 2016

This year's volatility created ample opportunity for retail traders to buy the dips and cash in on run-ups, said Steven Quirk, head of trading at TD Ameritrade.

"When there's moves like we've seen in energy, it can be 40 percent of our futures trading," he told CNBC.

"Normally, it would be maybe 15 or 20 percent," he added.

The volatility also created a cult trade in instruments like the VelocityShares 3x Long Crude Oil ETN (NYSE Arca: UWTI). The risky exchange-traded note gave traders the opportunity to reap exponential gains — or take big losses — on the rise and fall of oil prices.

The opportunities could continue as Nigeria and Libya — both exempt from output cuts — aim to return supply to the market and nimble U.S. drillers eye the $55 to $60 per barrel range that will make more drilling profitable.

"It's not the old oil market. There's just a lot of flexibility, a lot of moving parts to it. It's going to be volatile," Kilduff said.

CNBC's George Manessis contributed reporting to this story.

Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.