For much of Monday, crude oil (-CL) in New York traded below $90 a barrel -- and just missed its first close under $90 since Dec. 24.

While crude settled at $90.12, down 56 cents on the day, it may be headed lower still -- perhaps reaching $85 to $86 a barrel.

This is not an idle noting of price. Gasoline prices have started to come down as well. According to AAA's Daily Fuel Gauge Report, the national average price for regular unleaded gas was $3.746 a gallon on Monday, down from a peak of $3.786 a gallon just this past Thursday.

The average has fallen now for five straight days; the increase for the year has dropped from 17.6% to 16.4%.

Several factors are pushing oil prices lower, says Stephen Schork, editor of The Schork Report, which tracks energy and shipping markets.

Prices moved too far, too fast. Crude in New York jumped to as high as $98.66 a barrel on Jan. 30, a jump of 7.45% from Dec. 31 and 27% from its 2012 low of $77.69 on June 28. The increase was "beyond the buying capacity of consumers," Schork added.
Gasoline prices followed just as quickly, rising as much as 17.6% before starting to fall last week.

U.S. retail gasoline prices are heavily influenced  by the price of Brent Crude, the benchmark North Sea oil. Brent, in turn, is influenced by the health of European economy.

Europe is headed toward a second year of recession, with Eurozone unemployment at 11.9% and gasoline demand falling. Brent settled at $110.09 a barrel on Monday afternoon, down 31 cents on the day. It's down 7% from a recent peak at $118.29 on Feb. 14. European gasoline prices were around $8 a gallon at the same time, and drivers have cut back, Schork said.

Lastly, the economic malaise in Europe -- complicated by likelihood of another Italian election soon -- has pushed the euro lower against the dollar. That also has pushed oil prices lower.

Schork believes crude in New York will fall further, probably hitting a near-term low in the mid-$80 range for now. The seasonal falls that typically pull oil lower may still come.

Absent a headlines-making shock, like increasing Middle Eastern tensions, he thinks it's possible crude in New York and even Brent have hit a 2013 peak.

The prospect of lower energy prices, meanwhile, kept energy stocks at bay. The sector has been the weakest of the 10 sectors of the Standard & Poor's 500 Index ($INX).  Exxon Mobil (XOM) was down 48 cents to $88.75. ConocoPhillips was down 66 cents to $57.62.

Chevron (CVX), however, gained 59 cents to $117.49. Hess (HES) was up $2.30 to $68.84 after announcing it will divest its refining, marketing and trading businesses.

The S&P 500 finished up 7 points, to 1,525. It is 40 points under 1,565.15, its peak close, set on Oct. 9. 2007. The Dow Jones industrial Average ($INDU) fell as many as 59 points in the morning but closed up 38 points to 14,128, its second-highest close ever.

The Nasdaq Composite Index ($COMPX) was up 12 points to 3,182.