Market Data 
Investing.com — The recent OPEC+ announcement to begin easing production curbs later this year has been blamed for the recent turmoil seen in , but one analyst believes that if prices continue to dwindle or fall below current levels, then the oil cartel could be forced to walk back or delay its plan to phase on output cuts as soon as August.
“We wouldn’t be surprised to see OPEC+ decide to delay bringing back the voluntary cut barrels and announce this move as soon as early August should oil prices remain in the $70’s,” Roth MKM said in Tuesday note.
Earlier this week, OPEC+ announced that it would extend its production cuts of 1.66 million barrels per day, or mbpd, through 2025, and added that is 2.2mbpd voluntary production cuts would continue for a further three months to September, after which these cuts would be phased out.
Oil prices had been down about nearly 10% in the five trading session through Tuesday. Despite rebound in oil prices on Wednesday, underlying sentiment remains fragile as concerns about oversupply persist.
The recent negative price action would have caught the attention of OPEC+, Roth MKM says, though cautioned that the phasing out of cuts due in Q4 us “very much subject to change over the next several months should market conditions warrant a change.”
Falling oil prices are big no-no for major oil producers including Saudi Arabia and Russia as the former needs an oil price that is “well above $90 per bbl to balance its budget,” Roth MKM adds, while the latter needs an even “higher price to finance its ongoing war in Ukraine”
But the room for significant drop in oil prices will likely be curtailed by seasonal demand in the summer that will keep crude inventories in check.
“We think summer oil demand is likely to be pretty healthy and the global inventories are likely to draw between July and September, so we still have a positive view on oil prices into the summer months,” Roth MKM said.
