Oil prices continue plunging, hitting five-month lows recently and market watchers are bracing for further losses.

Escalating European debt fears, a cooling Chinese economy and sustained headwinds slowing U.S. recovery are sending U.S. crude futures to below $95 a barrel from over $110 in March.

"The markets are pricing in gloom," analysts write in the Kilduff Report, an industry newsletter, CNNMoney reports.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

Market watchers remained concern over "demand growth as the EU's maladies spread; and spread they will."

While Europe's debt crisis has rattled markets for two years now, fears are growing that a Greek default is imminent.

A political stalemate has left Greek political parties unable to assemble a coalition government due to growing opposition of austerity measures slapped on the country by multilateral lenders.

If the deadlock goes on any longer, the country could be forced to hold a new round of elections in June, which many say would precipitate Greece's exit from the currency zone and further dampen the European economy, thus crimping oil demand.

"Greece's struggle to form a new government has moved to center stage," energy trader and consultant Ritterbusch and Associates says in a report, the Associated Press adds.

"The possibility of a significant economic slowdown in European economic activity is prompting contagion fears."

Gasoline prices in the U.S., which flirted with a nationwide average of just below $4 a gallon earlier this year, have retreated to around $3.73 a gallon, according to the AAA Daily Fuel Gauge Report, a welcome relief for many.

Prices have been spiking along the West Coast, however, but mainly due to refinery issues and not to global market trends.

"The West Coast is zigging while the rest of the country is zagging," says Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, according to the Associated Press.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown