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Here's a 'sinister'-looking oil chart

Oil prices are trading at their lowest levels in over a year, and according to some traders, they are about to go a lot lower.

Several factors have conspired to keep oil prices down this year, including a strong dollar, increased U.S. production, and slowing economies in Europe and Asia. Barrel of West Texas Intermediate (WTI) crude oil are down 15 percent from last year and is now at its lowest level since April 2013.

"With the WTI crude, there are estimates that it's basically costing suppliers about $70 a barrel to produce," said Erin Gibbs, who as equity chief investment officer at S&P Capital IQ Equity Research manages over $13 billion in assets. "Anything above $80, they are still willing to drill new wells and make new investments. So I can see the new equilibrium for WTI being about $80 a barrel."

The technicals support the case of lower oil prices, said Richard Ross, global technical strategist at Auerbach Grayson.

Looking first at a short-term chart of WTI crude prices, Ross sees a well-defined trading range between $97.50 on the low end and $107.50 from February to August of this year. In the process, crude made a bearish "head-and-shoulders" top pattern that eventually broke below the low end of that range. "Head-and-shoulders" patterns typically indicate an exhaustion of buyers and often portend lower prices.

Given the range was $10 wide, Ross sees an equivalent projected downside target from the bottom of the range. Current prices are right now close to the $87.50 target. However, they may not stop there.

"The story really goes from bad to worse in terms of WTI prices when we look at that longer-term weekly chart," said Ross, a "Talking Numbers" contributor. "You can see the technical damage there – even more sinister. We've taken out a five-year trend line."

A double bottom at roughly $77.50, established in Ross' charts in 2011 and 2012, makes for what he calls "a very inviting downside target."

Declining global stock markets may make things bad for oil prices, according to Ross. "One thing we know about crude prices over the last five to 10 years is that they tend to trade in the same direction as equities," he said. "So if this little pullback that we're seeing in the S&P 500 in the U.S. market and across Europe starts to gather a little steam, that's going to drag crude oil prices down with it."

To see the full discussion on crude oil prices, with Gibbs on the fundamentals and Ross on the technicals, watch the above video.

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