U.S. oil companies, still smarting from the crude price rout, are attracting a wave of new investment from unlikely sources - hedge funds and private equity firms flocking to the energy market for the first time to bet on a rebound.

The dollar was a contributing factor to oil’s crash between June and January as it rose 16 per cent against a basket of other currencies. However, the 60 per cent decline in crude from about $115 to $45 a barrel over the same period illustrates how crude was largely trading on its own fundamentals, as the US shale boom contributed to oversupply.

More than $100bn of spending on new projects by the world’s energy companies has been slowed, postponed or axed following the oil price plunge, evidence of the drastic industry action that will curb output in coming years.

The rebound in oil prices has wide-reaching implications. For one, it certainly affects the situation in Russia and the Ukraine. As the price of oil stabilizes, the Russian government has become more comfortable with its fiscal situation, despite the fact that low oil prices and Western sanctions have sunk the country into a recession that will likely last through next year.

The cutbacks by energy companies likely contributed to a drop in the production of industrial machinery, which fell 0.9 percent, its second straight decline. The strong dollar also likely held back machinery sales, because it makes goods more expensive overseas. Companies like Caterpillar are exporting fewer trucks, bulldozers and other industrial machines.

Europe’s oil capital is a victim of the sharp drop in oil prices since last year

U.S. Rig Count is down 6 rigs from last week to 888, with oil rigs down 8 to 660, gas rigs up 2 to 223, and miscellaneous rigs unchanged at 5.

Venezuela is pushing for a new agreement between OPEC and non-OPEC nations to stabilize oil prices, President Nicolas Maduro said on Friday, in the most serious indication yet of a renewed drive to boost prices back to $100 per barrel.

May 17 State-owned Qatar Petroleum will announce a restructuring plan in the coming months to adapt to the drop in oil prices, the head of its wholly owned international subsidiary said.

As Saudi Arabia pumps more and more crude, creating a glut in global supplies, US producers recently have begun to curtail oil production as prices plummeted. The cost of production for US shale producers is significantly higher than for conventional production in Saudi Arabia and in other OPEC countries, which gives those producers an advantage at a time of sagging oil prices.

Saudi Arabia strategy was an attempt to put pressure on high-cost producers such as the US shale drillers.

EIA’s Drilling Productivity Report (DPR) for April had forecast a 57,000 b/d decline during May in total crude oil production from seven U.S. regions, which together accounted for about 95% of U.S. crude oil production growth during 2011-13. This was the first time the DPR had indicated a decline in expected production since the report was first issued in October 2013. Signs of declining U.S. tight oil production amid lower crude oil prices have been a widely watched market indicator of firming oil market balances. The latest DPR, released on May 11, expects a further decline in crude oil output from the seven regions during June. Overall, EIA is now projecting U.S. oil production to average 9.2 million b/d in 2015, 40,000 b/d lower than in last month’s forecast.

Even with the decline in rigs, U.S. dry natural gas production continued to grow, reaching record highs in December 2014 of more than 74.3 billion cubic feet per day (Bcf/d), and retaining an average production in February 2015 of more than 74.2 Bcf/d, a 10% year-over-year rise from February 2014.

Despite Europe’s desire to loosen its reliance on Russian gas, the shale revolution has turned out to be a dud. Difficult geological conditions, fierce environmental opposition, cumbersome regulations and a bloody war in Ukraine have conspired to quash investors’ enthusiasm and wear down their patience. The collapse of oil prices to less than $50 a barrel in March was the final straw because the cost of much of Europe’s gas, including Russian imports, is linked to crude.

North Sea Brent crude oil prices averaged $60/barrel (b) in April, a $4/b increase from March and the highest monthly average of 2015. Despite increasing global inventories, several factors contributed to higher prices in April, including indications of higher global oil demand growth, expectations for declining U.S. tight oil production in the coming months, and the growing risk of unplanned supply outages in the Middle East and North Africa.