Crude prices are pushing up against $40 per barrel, defying many bearish predictions from the first quarter. Output cuts in nearly all major oil producing nations have been effective thus far and can be expected to continue through at least July. Even after the supply cut deals expire, however, crude producers are now forecast to cut hundreds of billions of dollars in spending on expansion for years to come, which should provide support to longer-term pricing prospects. It is important to note that US production capacity from shale producers also remains vulnerable with many drillers still staring down the barrel of bankruptcy.

Related ETFs: United States Oil Fund, LP (USO), Energy Select Sector SPDR Fund (XLE)

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