Here's why energy stocks are having trouble rallying

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The problem with oil stocks

What happened to the recovery in oil stocks?

The pricing and volume action are telling me that investors are doubting the hoped-for 2016 recovery in production volumes.

Yesterday, Chevron hit a three-year intraday low.

The main Energy ETF, a basket of the energy stocks in the , has staged three separate attempts to rally since hitting lows in December and January and is again fading, essentially moving straight down for the past six weeks. Volumes have also faded.

And the rally in crude has stalled. Since bottoming in the low $40s in early March, West Texas Intermediate, the main U.S. benchmark, has staged an impressive rally (over 40 percent) to trade between $58 and $61, but has been stuck in that range for the past six weeks as well.

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Here's the problem: Everyone bought energy stocks aggressively in early 2015 on the theory that oil production would bounce back in 2016.

It's human nature. The optimists are focusing on a bounce.

Anticipating that, volumes in big energy ETFs like Oil Service and Exploration & Production picked up dramatically in January as the sector appeared to be bottoming out.

But many are starting to realize that, while oil prices may stage a modest comeback, oil production may not, at least any time soon.