West Texas Intermediate, or WTI crude futures slipped below $100 a barrel mark for the first time since May 11 on Tuesday - falling nearly 10 per cent in intraday trade before recouping some of the loss.
The sharp fall, according to oil watchers, came on the back of concerns that a global economic slowdown will ultimately dent demand.
Meanwhile, Citi on Tuesday suggested that oil prices could dip to $65 per barrel by 2022-end and $45 by the 2023-end in case of a global recession and demand tanks.
On the other hand, oil bulls see the prices surge despite recession. Those at JP Morgan, for instance, see oil prices at $380 per barrel in a worst case scenario if Russia starts cutting crude oil production in retaliation for the sanctions.
Christopher Wood, global head of equity strategy at Jefferies, too, expects the oil to hit $150 a barrel going ahead amid geopolitical concerns.
One way oil can spike higher is escalation of the Ukraine conflict and a resulting decision by Europe to take concrete action to stop buying Russian energy, says Woods. Such a risk has grown with the reports of atrocities committed by Russian forces and related allegations of war crimes. All of this makes it harder to negotiate a deal, he says.
But to what extent is the oil market pricing all the fears in, and is the fall in oil prices temporary?
Paul Hickin, Associate Editorial Director, S&P Global Commodity Insights says dated brent will trade above $100/bbl till 2022-end. While there will be supply-side risks around Russia and OPEC+, recession fears have started to trickle in. There's pressure on India, China from EU regarding Russian oil use, he says.
So, all this means that we still will continue to pay higher prices for petrol and diesel for now – unless the government cuts excise duty on these two products.
Technically, here are the key levels you need to watch on MCX Crude that trades close to Rs 7,800 mark
 "Where are crude oil prices headed?")
