US West Texas Intermediate (WTI) crude fell below $45 per barrel for the first time since the Organization of Petroleum Exporting Countries (OPEC) agreed to cut output in November. Brent crude slipped below $47 before staging a modest recovery on Friday.
OPEC efforts to cut production encouraged US shale producers to pump more, which is dragging prices down.
After a sharp drop, oil prices saw a rebound with Brent trading at $48.61 per barrel and WTI rising to $45.87.
In November, OPEC signed a deal to curb production aimed at easing global oversupply. Prices were propped up temporarily, but for US shale producers this was an indicator to resume drilling.
The US oil rig count increased for a 15th straight week at the end of April. Since January 13, the number of rigs has grown by 175, or 33.5 percent more.
Additionally, last week US President Donald Trump continued his pro-oil policy by signing an executive order aimed at expanding offshore oil and gas drilling in the Arctic and Atlantic Oceans, previously prohibited by Barack Obama’s administration.
OPEC, Russia and other producers initially agreed to curb production by 1.8 million barrels per day (bpd) for six months from January 1 to support the market and push prices to $60.
While the cartel’s kingpin Saudi Arabia is disappointed prices are below the target, OPEC regards the agreement as positive for the market and wants to extend it.
"The willingness to extend the current understanding is strong among OPEC and non-OPEC participants," an OPEC delegate told Reuters, declining to be identified by name.
However, he thinks more cuts are unlikely.
"I have doubts that more cuts will be discussed as the current agreement is yielding a positive outcome," he said.
Russian Energy Minister Aleksandr Novak said on Thursday, Moscow backs the extension of the accord.
"Now we are holding final negotiations on the matter with our partners and are inclined toward the extension," said Novak.