Goldman Sees Hard Path to OPEC+ Extension for Russia, Saudis - Bloomberg

Goldman Sees Hard Path to OPEC+ Extension for Russia, Saudis - Bloomberg:

Uncertainty over oil supply and demand fundamentals is making it tougher for Russia and Saudi Arabia -- the architects of the OPEC+ deal -- to reconcile their differences over the framework for an extension of their output pact into the second half, according to Goldman Sachs Group Inc.

Current demand growth “neither will support exiting the production agreement, nor is bad enough to reinforce more cuts,” Goldman Sachs Head of Commodity Research Jeffrey Currie said in an interview in St. Petersburg. Combined with uncertainty over Iranian exports and growing U.S. shale output, it “becomes increasingly difficult to know what production levels will balance the market.”

As the Organization of Petroleum Exporting Countries and its allies prepare to discuss the output cap in Vienna, oil analysts are weighing the chances of a potential oversupply amid slower demand growth. A weakening in consumption may require the group to extend cuts, a task which Russia may not be ready to sign up to.