In the energy market on Monday, oil dropped off, with crude for March delivery closing at $40.08, down $1.60. March reformulated gasoline plunged after its recent runup, shedding 12 cents, to $1.1492/gallon.

Oil, which had been on a tear that took it above $48 on January 26, largely due to OPEC production cuts, is back in the doldrums again.

“OPEC’s compliance continues to be impressive but may be prolonging their own economic pain by creating more demand destruction,” said Phil Flynn, of Alaron Trading.

And Edward Meir, of MF Global (NYSE:MF), wrote that, “The bearish macro backdrop should cap any sharp rallies above $50, while the OPEC cutbacks seem to have stopped — at least for now — the worst of the recent downward spiral … Of the two variables, the macro element is by far the more important.”

Elsewhere, the United Steelworkers union agreed to extend talks on a new contract for thousands of workers at U.S. refineries, thereby avoiding a strike, at least for the moment.

Source: Crude Drops

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