Saudi surprised the world by cutting oil output to less than 10 million barrels a day, which is below its pre-set level, and indicating a renewal of its plans to slash crude output in six months. With this, the world’s biggest oil exporter is currently pumping at a 22-month low.

WTI crude ETF United States Oil (USO - Free Report) and Brent crude ETF United States Brent Oil (BNO - Free Report) added about 1.5% and1.6%, respectively, on January 12, 2017.

The world is anticipating a sharp and much-needed rebound in oil prices this year on the OPEC output cut deal signed on November 30. OPEC had decided to cut production by about 1.2 million barrels a day by January. The agreement excluded Nigeria and Libya but enacted a quota on Iraq for the first time since the 1990s.

Plus, on December 10, OPEC cut the first deal with non-OPEC since 2001 to reduce output this year. These promised cuts initially psyched up energy investors who expected a sharp rebound in oil prices. But uncertainty over the credibility of the deal kept oil prices volatile.

Even though OPEC managed to be true to the deal, U.S. shale oil production will likely gain traction. This in turn can bring back oversupply into the market and weigh on oil prices. Already, U.S. rig counts are on an uptrend. As a result, oil prices kept on swinging between gains and losses in the last one and a half months, though it mostly stayed over $50/barrel.

Apart from Saudi, China played a major role in boosting oil prices lately. China’s top state-owned oil producer National Petroleum Corp. said that the country's net crude imports will see a 5.3% rise to 396 million tons in 2017, with crude consumption likely to touch a record 594 million tons or 12 million bpd this year.

India too is seeing increased demand for oil. As per the source, the country’s improving economic condition and rising income increased vehicle sales and the resultant demand for oil. This is why oil usage surged 11% to a record high in 2016. As per analysts, India's oil demand is expected to grow 7–8% this year, outpacing China’s over 3% growth. If materialized, 2017 will be the third year in a row when India’s oil usage will be higher than that of China.

Against such a backdrop, investors bullish on the oil price recovery may bet on leveraged oil ETFs like ProShares Ultra Bloomberg Crude Oil (UCO - Free Report) . The product offers two times exposure to the daily performance of the Bloomberg WTI Crude Oil Subindex. UCO added about 2.9% on January 12, 2017.

As a caveat, investors should note that these leveraged products are extremely volatile and suitable only for short-term traders. Additionally, the daily rebalancing – when combined with leverage – may make these products deviate significantly from the expected long-term performance figures.