Oil is currently in a very technically "oversold" condition, and although these conditions can extend for periods of time, at some point shorts in the market will look to cover and thus a short covering rally will ensue. This is where I will be looking for opportunities to sell crude oil. In addition, once a market has broken out of a previous trading range, the market has a tendency to go back and "test" the previous range. I think such a scenario in oil is likely.
That being said, how could one potentially look to play oil from the short side at this point? Well, there are numerous ways. I think given recent market activity one should look to be a seller on a test of the $90 per barrel mark should the market get back up to that level. In addition, one can watch the "pullbacks." If the market attempts to rally, but the rally attempts are shallow and lacking in any conviction, that may be a cue to get short.
One could either sell crude oil futures or sell call options depending upon one's risk tolerance, capital, and experience. For those more comfortable with limited risk positions, put options may be purchased. Regardless of how one decides to position in the market, I feel that selling into rallies is the way to go and will put you on the right side of the market.
Please note: Futures and options trading is inherently risky and isn't suitable for all investors. Past performance isn't indicative of future results. Stop-loss orders meant to limit losses may not be effective because market conditions may make it impossible to execute such orders.