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Oil Producers Risk Severe Price Slump If Freeze Deal Fails

  • Long build-up magnifies cost of potential failure: Citigroup
  • Rationale for deal unravels as prices recover: Goldman Sachs
Bloomberg business news

Will Oil Remain in a Trendless Market?

Updated on

The early success of an oil-supply accord between OPEC and Russia in reviving crude prices is magnifying the potential risks should producers meeting this weekend fail to complete their deal.

Brent crude futures, which sank to a 12-year low in January, have climbed about 30 percent since Saudi Arabia, Russia, Qatar and Venezuela reached a preliminary agreement to freeze output on Feb. 16. While Russia’s energy minister says he’s “optimistic” the accord will be finalized in Doha on April 17, Goldman Sachs Group Inc. warned that the weight of expectation poses a “bearish catalyst’ if the talks fail.