The benchmark crude futures contract on the New York Mercantile Exchange fell nearly 4% to a new 5 1/2-year low as the U.S. opened, after the bank popularly known as Wall Street’s “smartest guys in the room” admitted that the forecasts it made a couple of months ago were too optimistic by around 40%. In early trading in New York, it stabilized around $46.70/bbl, more than $1.50 below where it closed Friday.

Goldman analysts said in their latest research that oil prices would bottom this spring at an average of $40.5 a barrel thanks to the yawning gap between supply and demand. They said prices would recover gradually to around $58/bbl by the fourth quarter and would average $65 next year, as production from expensive fields tails off, bringing the market back into balance.

Goldman reckons that as lower prices force oil services companies to slash what they charge for their services, it should be possible for fields to make a profit at a price of around $75/bbl, rather than the $95 it forecast previously. Fields that are more expensive to develop won’t have a future in Goldman’s “New Oil Order”.

Goldman slashed its forecast in part because it no longer expects the Organization of Petroleum Exporting Countries to cut output to balance the market.

Previously, they and most others had expected OPEC to accept a lower share of the global market and cut their own output to support prices when it next meets in June. However, comments from Saudi Arabian officials have made it clear in recent weeks that they would rather the market balance by itself, a message rammed home Monday by another prominent Saudi businessman (albeit not one responsible for determining policy.”

Prince Alwaleed bin Talal told USA Today that “to get all OPEC countries to approve and accept (a production cut), including Russia and Iran, and everybody else, is almost impossible…We can’t trust all OPEC countries. And can’t trust the non-OPEC countries.”

Alwaleed said that prices may rebound a little if some supply leaves the market, but said “I’m sure we’re never going to see $100 any more.”

There has been a steady stream of news about companies paring back investment as falling prices have made many projects unprofitable, especially among U.S. shale producers. Canada’s largest independent producer, Canadian Natural Resources Ltd. (CNQ), cut its forecast for 2015 capital expenditures by 28% Monday to $5.22 billion, effectively mothballing a big new project in Alberta.

As usual, the fall in oil reverberated around other world markets, especially those dependent on high prices. The Nigerian currency, the naira, lost another 2.9% against the dollar, while the Middle East’s largest stock market, Dubai, fell by the same amount.

Russia’s financial markets also sold off heavily as they returned from their usual extended holiday period. The ruble fell to 62.87 against the dollar, while the RTS stock index fell 3.1% and the yield on the government’s local-currency 10-year bonds rose to 14.74%. Those are all close to their worst level since the December panic that sent the ruble to a record low. The authorities had stemmed the panic by pressuring the country’s biggest exporters to buy more rubles, and by suspending most of the country’s rules on bank capital adequacy.