CNBC reports that Brent crude needs to work through its oversupply issues before it can punch through its current price range of between $40 and $50 per barrel, according to Thom Payne, director at Westwood Global Energy Group.

That’s despite the latest agreement by the Organization of the Petroleum Exporting Countries and its oil-producing allies to extend a historic oil production cut until the end of July. 

The alliance cut production by 9.7 million barrels per day at the start of May 1, and the cuts — which have helped push up crude prices in the last two months — was initially set to decline on July 1.

“If you take February to May, you’ve got an average built position, oversupply of 40 million barrels a day. So we’ve effectively built about 2 billion barrels of additional storage,” Payne told CNBC’s “Street Signs” on Monday.

“We definitely need to drain that before we can see prices move materially above that kind of ($40 to $50) price structure,” Payne said.

His comments came after the group, known collectively as OPEC+, on Saturday agreed to extend its record oil production cut for another month as it seeks to balance the global oil market.

Looking ahead, Payne said: “What’s likely to happen is that the oil markets move to a net draw or undersupply position by around July, August of this year.” This would be “very supportive” of the current $40-50 per barrel price range for Brent, he added. That’s assuming that the demand scenario plays out in line with the general consensus and OPEC achieves 100% compliance — a feat Payne admits is “probably a little bit optimistic.”