Thanks in large part to rebounding oil prices, the iShares MSCI Canada ETF (NYSEArca: EWC) is turning in one of this year’s best performances among single-country developed markets exchange traded funds with a gain of close to 25%.

That is a reversal of fortune from 2015 when Canadian stocks and ETFs and tumbled due to weakening commodities prices and the slumping Canadian dollar, scenarios that triggered fears of a recession. Canada’s oil production could either lift or weigh on the economy, depending on the energy market.

Some market observers, citing supply and demand dynamics, believe oil is rallying without strong fundamental cause. A case can be made that oil’s rally is defying still troubling supply dynamics and tepid demand. Elevated levels of production remain an issue for oil as well. OPEC has kept up production to pressure high-cost rivals, such as the developing U.S. shale oil producers. The International Energy Agency expects it will take several years before OPEC can effectively price out high-cost producers.

Canada is one of the largest non-OPEC producers in the world.

EWC and Canadian stocks got a boost from the production cut announced earlier this month by the Organization of Petroleum Exporting Countries. OPEC plans to diminish output to a range of 32.5 to 33.0 million barrels per day from its current estimated output of 33.24 million barrels per day. While Saudi Arabia, OPEC’s biggest producer, has agreed to reduce output, Iran, Libya and Nigeria might not follow suit.

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