Crude oil is getting smoked

Crude oil is getting smoked to start the week.

On Monday, the price of West Texas Intermediate crude oil was down more than 3% to around $US48 a barrel, giving back most of a huge rally the commodity experienced last week when prices moved from around $US46 a barrel to north of $US50.

The tumbling price of crude on Monday was also dragging down energy stocks, with Transocean (-8%), Chesapeake (-7%), Schlumberger (-2), and Whiting Petroleum (-10%) coming in as the biggest losers.

Here’s Monday’s drop in crude prices:

In a note to clients on Monday, analysts at Goldman Sachs reiterated a call that oil prices were going to stay “lower for longer,” calling for WTI to fall to $US40 a barrel in six months and $US45 a barrel in a year.

The firm said that part of the decline in oil prices seen during the summer had to do with macroeconomic factors, but was also related to a fundamentally oversupplied market.

Overall, markets were quiet on Monday with US stocks little changed as the bond market is closed for Columbus Day.

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