“n a nutshell, the ETF tends to outperform two months after an options signal, averaging a gain of 4.9% and higher 80% of the time. That’s compared to an average anytime two-month loss of 0.8%, with a win rate of just 53%,” notes Schaeffer’s. “However, once you get out six months, it tends to be downhill for USO. The fund was higher just 20% of the time six months and a year after signals, averaging much steeper-than-usual losses of 18.7% and 36.6%, respectively.”

Related: Bullish Musings on E&P Stocks

Technological improvements and greater efficiency has helped U.S. shale producers pump out crude oil at lower margins – some say it is now profitable at less than $50 per barrel. Additionally, companies are finding easy access to credit and private-equity firms have bought out struggling companies, which have kept production flowing.

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