Oil prices plunged last week as OPEC and its allies failed to reach an agreement on production cuts, and as prices look set to continue cratering, some are warning about the impact on the broader economy.

"Crude has become a bigger problem for markets than the coronavirus," Adam Crisafulli, founder of Vital Knowledge, said Sunday. "It will be virtually impossible for the [S&P 500] to sustainably bounce if Brent continues to crater," he added.

Crisafulli noted that oil is "critical" to the U.S. economy. Many people are employed by the industry, and highly leveraged oil and gas companies are key to the fixed income market.

"The sector is like the 'FANG' of credit, esp. high yield, given the enormous amount of debt it has outstanding," he said.

Oil prices have been suppressed since the coronavirus outbreak stoked fears about a slowdown in demand for crude. U.S. West Texas Intermediate crude has dropped 32% this year, while international benchmark Brent crude is down 31%.

Many on the Street expected OPEC to step in with deeper production cuts in an effort to prop up prices. But after talks collapsed Friday — OPEC ally Russia refused to agree to the proposed additional output reductions of 1.5 million barrels per day — there could now also be issues on the supply side.

The 13-member cartel and its allies, known as OPEC+, also failed to reach an agreement on extending the current production cuts. This means that on April 1, when the current agreement expires, each nation effectively has free rein over how much crude it pumps.

On Saturday Saudi Arabia announced massive discounts to its official selling prices for April, and the nation could theoretically pump up to its capacity of 12.5 million barrels per day.

"As from 1 April we are starting to work without minding the quotas or reductions which were in place earlier," Russian Energy Minister Alexander Novak told reporters Friday at the OPEC+ meeting in Vienna, before adding, "but this does not mean that each country would not monitor and analyze market developments."