Futures are down 2.3 percent this month in New York after slipping 6.3 percent in March. That belies three straight weeks of gains that ended April 14. What’s worrying investors is expanding U.S. crude output, which is damping optimism that OPEC-led supply cuts will be extended. While American production has expanded to the highest since August 2015, Saudi Arabia’s energy minister has acknowledged that the first quarter of curbs failed to bring stockpiles below the five-year average.
While the Organization of Petroleum Exporting Countries and its allies mull an extension to the six-month deal past June to drain a global glut, U.S. drillers targeting crude continue to add rigs to shale fields, boosting the count to the highest since April 2015. In a nascent sign that stockpiles may be starting to shrink, American inventories have fallen for the past three weeks after climbing to a record at the end of March.