Hopes for a deal among major producers, including several from the Organization of the Petroleum Exporting Countries and Russia, were a main driver in a rally that lifted U.S. crude prices more than 50% from their February lows. U.S. crude settled at $41.50 a barrel on Friday.
Now, much of those gains could be eroded in a market that has already endured a turbulent year, analysts say.
U.S. crude was recently trading 5.7% lower at $38.05 a barrel and Brent down 5.2% at $40.86 a barrel.
“This is an extremely bearish scenario,” said Abhishek Deshpande, oil analyst at Natixis. “Prices could touch $30 a barrel within days.”
Steep falls in crude could also weigh on equity markets more generally. Stocks have often moved alongside oil this year. Bank shares, for instance, many of which have large energy portfolios, have been pressured by the declines in oil.