The stock market lost ground on Monday morning, but the energy market felt the biggest damage. Crude oil prices in the U.S. dropped below $11 per barrel, hitting their lowest level since the 1980s and showing the incredible glut of supply on the market right now.

Stock market investors are worried more broadly about how what's happening in the energy sector could have ramifications for other industries down the road. As of 10:45 a.m. EDT on Monday, the Dow Jones Industrial Average (DJINDICES:^DJI) was down 276 points to 23,967. The S&P 500 (SNPINDEX:^GSPC) fell 22 points to 2,852, and the Nasdaq Composite (NASDAQINDEX:^IXIC) dropped 6 points to 8,644.

The latest company-specific news in energy came from Halliburton (NYSE:HAL), which released its most recent quarterly results. Meanwhile, the oil-tracking ETF U.S. Oil Fund (NYSEMKT:USO) has had to change its methodology in order to respond to demand among energy speculators and the unprecedented conditions in the oil markets.

Halliburton sees tough times ahead

Shares of Halliburton fell 2% after the oil services giant reported its first-quarter financial results. The numbers were largely expected, but they still showed just how hard a hit the sector has taken.

Long rows of black oil barrels.

Image source: Getty Images.

Halliburton saw revenue fall 12% year over year in the first quarter, with its completion and production segment seeing the largest declines. The company's drilling and evaluation business held up reasonably well, and revenue internationally actually increased from year-ago levels. But the core North American market saw 25% sales declines as Halliburton's customers took production off line.

In response, Halliburton had to take $1.1 billion in pre-tax impairment and other charges. That sent it to a loss for the quarter, although its adjusted net income excluding those charges rose by more than a third to $0.31 per share.

Like many energy companies, Halliburton is taking steps to cut debt levels and restructure its financing obligations to give itself the best chance to make it through the crisis with as little damage as possible. Nevertheless, plunging oil prices aren't helping pave the way toward a recovery anytime soon.

U.S. Oil Fund looks to the future(s)

Shares of U.S. Oil Fund were down 9% Monday morning, following the price of crude lower. Many investors have turned to the ETF to try to take advantage of a possible rebound in oil prices whenever it comes. But some of those energy investors might not understand the dangers involved, and what a recent change in the fund's investing strategy means for shareholders.

U.S. Oil Fund tries to track changes in oil prices by using futures contracts. Historically, it's done so by owning the futures contract that expires in roughly a month, rolling its holdings forward to the next month on a set schedule. But because so many investors have jumped into the fund, that methodology would've resulted in violating regulatory requirements limiting holdings. In response, the fund pushed 20% of its contracts into the contracts two months into the future.

The problem with that strategy is that futures already aren't reflecting what's happening in the spot market. Right now, May crude oil futures trade below $11 per barrel, but June futures are at $23 per barrel, and July futures trade at around $28. That reflects the expectation that temporary shutdowns will end and energy prices will rebound. However, that expectation is already baked into U.S. Oil Fund's price. If spot prices were to stay in the teens into June and July, shareholders could see substantial losses based on current futures prices.

Unfortunately, there's no good way to invest in spot energy commodities easily. Unless you own a big storage tank, trying to make money playing a rebound in oil is a lot tougher than it looks -- and could bring unexpected surprises to those who try.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.