What: The price of crude oil continues its slide down a seemingly bottomless pit, ending down 5% today to below $32 per barrel. That brought crude to its lowest settlement price since 2003 and took oil stocks down with it. Among the worst performers were Callon Petroleum (NYSE:CPE), WPX Energy (NYSE:WPX), CONSOL Energy (NYSE:CNX), Whiting Petroleum (NYSE:WLL), and Rice Energy (NYSE:RICE), all of which down by more than 10% by 3:00 p.m. EST on Monday.

So what: The continued slide in oil prices has two big impacts on producers such as Callon Petroleum and WPX Energy. First, it squeezes drilling returns, which for Callon Petroleum means that the 40% return it expected at a flat $40 oil price is no longer in its sights. Meanwhile, for a company like WPX Energy it will receive less cash flow on its unhedged oil production. With nearly 10,000 barrels of oil production per day currently unhedged, or roughly a quarter of its oil production, this drop will eat into WPX Energy's projected cash flow. Having said that, despite the impact oil prices have on producer cash flow and drilling returns, Whiting Petroleum's stock was actually upgraded by an analyst today. The analyst sees the recent pull back as a long-term opportunity, with Whiting Petroleum being a higher risk/reward name that has a lot of upside to a potential oil price rally. 

Meanwhile, natural gas-focused producers CONOSL Energy and Rice Energy are falling today because of the impact oil prices have on NGL prices, which is a big cash flow driver for these companies. NGLs are typically priced as a percentage of the oil price and with that price falling it is taking NGL values with it. In addition to that, CONSOL Energy is facing the additional weight from the fallout of a bankruptcy announcement from a rival in the coal sector, which is the other major commodity it produces.

Now what: With no bottom in sight for crude oil, it will likely lead to a lot more volatility for energy stocks. While there is a case to be made that producers like Whiting Petroleum or WPX Energy could be good long-term buys, these stocks are very high risk given that oil might still have further to drop.