Chart Book | Chart of the day: Nymex nudges lower

Three weeks of sharp falls for US crude oil prices in good volume of trade over the past three weeks, together with a steady drop in open interest on futures contracts since July, have sounded alarm bells for many traders caught long. There are even some market analysts who will tell you that crude on the New York Mercantile Exchange is dirt cheap. So is this the start of a new bear market? US crude oil might have dropped below the bottom of a very long-term triangle and is also below two standard deviations under the mean regression. But for more than four years, the market is best described as holding US$14 either side of a central rate of US$98 per barrel. Recent losses are a fraction of those in 2008 when prices really plummeted. Current levels are not low on that basis and this dip is probably a false break lower. Prepare to see prices revert to the mean.