After a weak start to the week, China’s central bank cut its reserve requirement ratio for all banks by 0.5 percentage point, effective Tuesday.

This move came as the G-20 failed to wow markets along with a plunging Chinese currency and stock market. The move helped extend gold higher, which already is having its best month in four years and the best February since the 1970s. For crude oil, the move is supportive as it appears the rig count fell on easier credit in China and uncertainty about investing in stocks and pile into gold and other hard commodities like oil.

This comes as the U.S. energy industry continues to get hurt. On Friday Baker Hughes reported that the oil rig count fell for the 10th week in a row dropping by 26 rigs. That puts rigs down 68% from the record peak of 1609 in 2014.

We have more layoffs in the energy industry that are being reported as well as capital spending cuts. Halliburton announced on Friday that they are slashing about 5,000 jobs. Kimray, Inc. announced on Thursday that it will lay off 10% of its workforce.

Last week Apache Corporation said they will see oil and natural gas production fall as much as 11% in 2016. Continental Resources Inc. said it projected a 10% cut and Whiting Petroleum Corporation, a 15% reduction. Devon Energy Corporation also forecasts a 10% decline earlier in the month and EOG Resources Inc. is predicting a 5% cut. What we are seeing is U.S. output crashing and that will start to cut into the U.S. oil glut.

We still believe that we are in the bust end of the cycle and we are going to create the environment for a coming boom. The oil market is looking to OPEC to see if they can live up to the production freeze agreement.

In the meantime, hedge funds are loading up on gold. Gold has been the best performing commodity this year and goes to show you about the confidence we are seeing in central banks. China is trying to show it can do more but will it be enough.