OPEC+ Set to Roll Back Some Production Cuts

OPEC+ production cuts have brought oil prices back from the brink, but the group will have to tread carefully to avoid triggering a new price collapse when it begins to reverse those reductions.
The Joint Ministerial Monitoring Committee, which reviews OPEC+ production, will meet on July 15, and will consider whether the group should keep 9.6 million barrels a day off the market, or roll that back by about 2 million barrels a day, as sought by Saudi Arabia, CNBC reported
OPEC+ has been policing its members and demanding high compliance of its latest round of cuts.
“The question is, going forward, if you start easing, which they are going to do, can they keep it together or do they open the flood gates?” said Helima Croft, RBC head of global commodities strategy. “Can you hold discipline within the producer organization?”
Croft said the wild card is whether there’s another wave of Covid-19 cases, large enough to force more economic shutdowns or even a lockdown by another country.
“There is a lot of optimism that the market can handle anything that is thrown at it, in terms of Covid,” said Croft. “Does OPEC+ have enough of an early warning system? They are going to have to be really nimble because there is so much uncertainty about a second wave.”
Oil prices began to fall early in the year, on the decline in China demand as it shut parts of its economy due to the spreading virus.