Other oil traders believe 2017 will be fertile ground for an oil rally. While production has declined in the U.S., recently rebounding oil prices are encouraging exploration and production companies to revisit spending plans with some increasing capital expenditures. That has some oil market observers concerned about a rising rig count and the subsequent impact on crude prices.

While OPEC is cutting back to alleviate price pressures, U.S. fracking companies could jump to capitalize on the windfall as crude oil prices jump back above $50 per barrel – according to U.S. Energy Secretary Ernest Moniz, shale oil producers can get by with oil at just over $50 per barrel due to advancements in technology and drilling techniques that have helped cut down costs.

In addition to OPEC’s production cuts, 11 major oil-producing countries that are not OPEC members also recently agree to pare output.

“Hedge funds reduced short positions, or wagers WTI will drop, by 10 percent in the week ended Dec. 20, U.S. Commodity Futures Trading Commission data show. WTI declined 1.4 percent to $52.23 a barrel in the report week. Prices settled at $53.02 a barrel in New York on Friday, the highest close since July 2015,” according to Bloomberg.

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