The spread between Brent crude oil futures contracts and U.S. West Texas Intermediate (WTI) hit a fresh three-year high on June 1 with the latter set for a second consecutive week of declines as U.S. oil output comes close to matching that of top producer Russia.

The premium doubled in about a month as a lack of pipeline capacity in the U.S. traps much of the output inland.

The spread between the two benchmarks, which climbed above $11.50 a barrel (bbl), had narrowed slightly by 8:55 a.m. CDT (13:55 GMT) to about $10.54 as Brent erased some of its earlier gains.

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U.S. crude production has been rising to record levels since late last year. In March, it jumped 215,000 barrels per day (bbl/d) to 10.47 million bbl/d, a new monthly record, the Energy Information Administration said May 31.

"The move on that spread is difficult to anticipate as it does not necessarily react to news, headlines," Petromatrix said in a note. "One can be long or short on either of the benchmarks and be stopped-out by the volatility of the Brent-WTI."

WTI fell 45 cents to stand at $66.59/bbl. For the week, WTI was on track for a 1.9% fall, adding to last week's near 5% decline and shrugging off a 3.6-million-bbl drop in U.S. crude stockpiles last week.

Global benchmark Brent initially stayed within May 31's range but then fell 62 cents to $76.94/bbl. It was still set to rise 0.6% for the week.

Sources told Reuters last week that Saudi Arabia, the effective leader of OPEC, and Russia were discussing boosting output by about 1 million bbl/d to compensate for losses in supply from Venezuela and to address concerns about the impact of U.S. sanctions on Iranian output.

This pushed Brent to a three-week low below $75/bbl on May 28. Brent recovered some ground, however, when a Gulf source flagged that any rise in production would be gradual.

Russia would be able to raise its oil output within months to levels last seen before a global production-cutting deal took effect if there is a decision to unwind the pact, a Russian Energy Ministry official said.