Qatar, Russia, Saudi Arabia and Venezuela have been in discussions to hold output steady at January levels, but only if other producers followed suit. Russia is the largest non-OPEC producer of oil and natural gas, though the country prefers higher prices even more so than Saudi Arabia.

USO holds WTI futures contracts in the nearby month and rolls its cash into the next month’s contracts before being forced to take physical delivery.

Since USO needs to roll contracts upon expiry, the ETF will be subject to contango issues. Consequently, more sophisticated traders may short USO and go long later-dated futures to take advantage of the arbitrage opportunity when the fund rolls its contracts. [Positioning for an Oil ETF Rebound? Watch For Contango.]

“Saudi Arabia is the world’s largest oil exporter, according to the U.S. Energy Information Administration, and has had to look at and take several cost-cutting measures, while considering alternative areas for growth in this environment of lower oil prices,” adds CNBC.

United States Oil Fund