Oil and the related exchange traded products, such as the United States Oil Fund (NYSEArca:USO), which tracks West Texas Intermediate crude oil futures, snapped a lengthy winning streak Wednesday on news that Russia is opposed to further deeper output cuts.

That news pressured the already downtrodden energy sector ETFs such as the Energy Select Sector SPDR (NYSEArca:XLE) and the iShares U.S. Energy ETF (NYSEArca:IYE). Rig counts have recently ticked higher and with credit and earnings issues improving for some U.S. shale drillers, those companies may seize the opportunity to exploit higher pricing in the near-term. Global energy ETFs are struggling, too.

“Oil prices rose after an Organization of Petroleum Exporting Countries (OPEC) deal in November sparked optimism that production cuts would help bring supply and demand into balance. Higher-than-expected supply and weak demand then dashed these hopes. This was evident in more speculative bets on falling prices,” said BlackRock in a note out Wednesday.

While the Organization of Petroleum Exporting Countries have moved to cut production, expectations of continued U.S. shale production remain a deterring factor. Nevertheless, recent U.S. inventory drawdowns, which if sustained, could support the current price levels.

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