Oil prices gained significantly from around $43 a barrel in mid-November to more than $53 a barrel at the start of last week. That rally was fueled in large part by the Organization of Petroleum Exporting Countries' decision to curb output by partnering with 11 other crude oil producing nations, including Russia. The cartel bolstered the market's confidence by delivering strong compliance with the supply-reduction agreement. Some media reports suggested that OPEC's kingpin Saudi Arabia is trying to push the commodity to $60 a barrel this year. But on Tuesday, Ryan Lance, ConocoPhillips's CEO told CNBC on the backdrop of an energy conference in Houston that we are still living in a "lower for longer" and a highly volatile oil price environment. The prices, Lance said, could surge to as high as $80 a barrel in the next couple of years, but we will also "see $40 on the back end of it."

A day later, the US Energy Information Administration released its weekly report which showed an 8.2-million-barrel increase in crude oil inventories in the US. That build up was more than 4 times higher than analysts' estimate. Also, the report showed that due in large part to the surge in US oil production as prices crossed the $50 a barrel level, the domestic crude oil stockpiles have climbed for nine straight weeks and pushed the total amount of inventories to an all-time high of 528.4 million barrels. The figure excludes the strategic petroleum reserves. This was followed by a grim warning from Harold Hamm, the CEO of Continental Resources (NYSE:CLR), one of the nation's largest shale oil producers, who said that US shale drillers could "kill the market" if they ramp up production too aggressively.