Related: Oil ETFs Look for Supply Catalysts

While U.S. shale producers previously continued pumping in the face of low prices, the industry has recently revealed a spate of capital spending reductions, indicating still low crude prices are taking a toll. Low oil prices are also prompting speculation about credit downgrades for some exploration and production firms that already carry junk credit ratings.

Traders who are wary of further weakness in the energy segment may turn to inverse ETF options to hedge against declines. For instance, the Direxion Daily Energy Bear 1x Shares (NYSEArca: ERYY) takes the -1x or -100% daily inverse performance of the Energy Select Sector Index. The ProShares Short Oil & Gas (NYSEArca: DDG) tries to reflect the inverse or -100% daily performance of the Dow Jones U.S. Oil & Gas Index.

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