Op-Ed: Will OPEC Production Cuts Fail?

But OPEC’s cuts were called in late fall, just before refinery maintenance season, which is a difficult time to reduce inventory, he said.

“To achieve a massive decline in oil storage levels during the refinery maintenance season is unlikely to start out with,” Warren said. “And I think a lot of people were looking to that, and because it didn’t happen, oil prices get stuck.”

Once refinery runs ramp up and the summer driving season gets underway, inventory stockpiles will dwindle as they do every year. And that’s when oil prices could hit that mid-$60s mark, he said.

But if the increased rig count pumps out copious amounts of hydrocarbons as early as this summer – supplementing the expected balance in storage inventory. Jaffe says the market might have trouble getting to $65 oil.

“Even if you have the maximum compliance – [Saudi Arabia] is supposedly at 95 percent compliance now … What is the chance that in July when the shale comes on, there all still going to be at 95 percent compliance?” she said.

For that matter, Jaffe thinks there’s an equal chance prices could go in either direction.

“That’s why I think they market – if you look at the options market – everything is clustered around $50.”

Nevertheless, all three experts expect OPEC to extend the production quotas for the rest of the year – an option laid out in the initial deal – when the group reconvenes next month.

“I think they’re going to have to if they care about the price of oil,” Jaffe said. “The only way I would say no, they’re not going to extend, would be if the Saudis announce they’re not doing the IPO. If they cancel the IPO, I don’t see that they have to extend the cut. If they don’t extend the cut, the market is going down.”