Crude oil has declined sharply this month, as the prospect of a renewed supply glut from U.S. shale threatens the market’s quest for balance.

Since reaching 19-month highs on February 23, U.S. West Texas Intermediate (WTI) futures have plunged more than 11%, marking their worst retreat in a year.[1] Brent crude, the international futures benchmark, has declined over 9% during the same period.

The latest selloff was triggered by escalating fears that a flood of U.S. shale could offset a global pact to reduce crude supplies much like it did between 2014 and 2015. The Organization of the Petroleum Exporting Countries (OPEC) has achieved record compliance since agreeing to curb output by 1.2 million barrels per day.Non-OPEC members, led by Russia, also agreed to curb output by 558,000 barrels per day, but have been less successful in meeting their quotas.

At a compliance meeting with OPEC counterparts on Friday, Russian energy minister Alexander Novak said his country would reduce its daily output by 300,000 barrels by the end of April. That was the amount Moscow pledged to cut back in December.[2]

Despite these efforts, oil prices are crashing. Encouraged by months of price stability, U.S. oil producers have been steadily ramping up capacity. Oilfield services provider Baker Hughes reported Friday that active U.S. oil rigs rose for a ninth straight week. The active rig-count rose by 14 to a total of 631 in the latest week, the highest level since September 2015.[3]

The recent price drop has a lot of parallels to the 2014-2015 collapse, although the details differ significantly. Two years ago, OPEC was unwilling to give up market share, vowing to raise production to squeeze global competitors. Now, OPEC is ready to support prices as Gulf states struggle with weak finances.

The glut of U.S. shale could push the market back to oversupplied levels, putting downward pressure on crude’s ability to rally. Although demand is rising, supplies from U.S. refineries could rise faster.

Prior to the latest drop, crude prices had traded comfortably above $52 a barrel for most of the year. The latest predicament has led some analysts to conclude that prices will remain stuck below $60 a barrel for the remainder of the year.

“While oil prices are expected to recover toward the end of the year, they will remain in the $50-$60 band given the high level of stock,” energy lender Arab Petroleum Investment Corp said Monday. “We expect OPEC to maintain the agreed production quota at around 32.5 million barrels a day for the rest of the year.”[4]

[1] Reuters (March 15, 2017). “US crude settles at $48.86, up 2.4% on stockpile drop, snapping 7-session losing streak.” CNBC.

[2] Reuters (March 17, 2017). “Russia cutting output by 300,000 barrels per day by end of April.” CNBC.

[3] Akin Oyedele (March 17, 2017). “US oil rig count rises for 9th straight week.” Business Insider.

[4] Sam Wilkin (March 20, 2017). “Oil Prices Seen Stuck Below $60 This Year as High Stocks Persist.” Bloomberg.