Oil Prices Drop Amid Record High US Supplies, Hurting OPEC's Efforts

Following historic highs for crude inventories and a ninth-consecutive increase in the Baker Hughes rig count, oil prices slipped Monday after a slight recovery from lows not seen since the Organization of Petroleum Exporting Countries colluded to cut back production at the end of November—a move the American oil industry appears to have all but negated.

Brent crude, an international benchmark, fell to $51.69 per barrel Monday, stalling a climb to $52 after a sharp drop to $51 from around $56 during the second week of March. West Texas Intermediate, a U.S. petroleum price indicator, slipped to $48.22 per barrel Monday, ending what appeared to be the start of a recovery from a drop to below $48 from over $53 earlier in the month.

Read: Oil Futures: Russia Won't Join OPEC Despite Price Increase And Market Stability After Production Cut

The last time WTI stood below $48 was in late November, just before OPEC announced it reduce production by 1.2 million barrels per day, or about 4 percent. The cartel initially pushed prices into the $55 to $60 range, and managed to keep prices afloat until recently as non-member countries such as Russia, Kazakhstan, Oman, Azerbaijan and several others pledged to join in, cutting a proposed 558,000 barrels per day.

OPEC’s own basket price index followed a trend similar to those of WTI and Brent, drooping slightly to $49.36 after what seemed like a comeback from a nosedive to $48.63 from $53.54.

The price-gouging effort by the collection of oil-rich nations was intended to at least somewhat correct for two-and-a-half years of devastatingly low prices, which at times crippled the economies of Russia, Saudi Arabia and Nigeria, among others.

Read: Are Oil Prices Falling? Saudi Aramco Cuts Cost Of Its Crude, Damaging OPEC Plans

But as of Monday, analysts at J.P. Morgan cut their 2017 and 2018 price forecasts for both Brent and WTI, while the Energy Information Administration projected record U.S. crude production of 9.7 million barrels per day in 2018, up from 800,000 last year.