The Permian Basin will be a key factor in the growth of U.S. oil production. Of the 940 oil rigs in operation, about 377 are in the Permian Basin. Many oil producers have also decided to drill but not complete wells in the region due to minor transportation constraints, which leaves a lot of untapped potential on the ground.

Still, some analysts are bullish on oil going forward.

“We believe that the backwardation in the Brent futures strip supports our thesis that the market is currently undersupplied, and if the OPEC/non-OPEC cuts are extended through the end of 2018 then we estimate the oil market will remain in modest under-supply until 2019,” according to Jefferies, OilPrice.com reported.

Several other Wall Street banks have recently boosted oil price targets for 2018 as well.

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