Oil Dips Along With Equities

Updated from 12:33 p.m. EST

Crude oil and distillate futures plunged Monday on continued worries that economic weakness in Asia could reduce demand for commodities.

The April contract for crude oil closed the session down $1.57 to $60.07 per barrel on the New York Mercantile Exchange. Crude futures fell below the $60 level in after-hours electronic trading.

Reformulated gasoline is down 6 cents to $1.84 per gallon. Heating oil was 5 cents lower at $1.72 per gallon. Natural gas was trading 1 cent higher at $7.25 per million British thermal units.

The consensus among analysts is that energy commodities are continuing to move in tandem with equity markets. Stock markets in Japan, Hong Kong and other Asian countries fell by more than 3% overnight. U.S. equity markets opened lower as well, but recovered most of their losses throughout the day.

The coupling of equities and commodities first appeared last Tuesday when equity markets in Asia and the U.S. collapsed on fears that China's economy is slowing down. Energy markets, fearing a decline in demand, fell also.

"The talk on the trading floor is that if the stock market goes down, the economy goes down, so demand for oil will decrease as well," says Larry Levin, technical analyst at Secrets of Traders in Chicago. "We expect that the connection between stocks and commodities will persist through the end of this week," Levin adds.