Saudis and OPEC cut output? Maybe, but to me it's unlikely. The shale and heavy crudes coming onstream, combined with many flat economies worldwide, has taken supply above demand. The oil price is very sensitive to this. The Saudi's choice is to drop production to stabilise the price, or keep producing. If they drop production, the price stabilises but they have lost market share, which they will not get back for what looks like quite a few years (at least 15 by my calcs). If they keep producing, the price will go below the point at which many of the new producers are profitable. There are two levels of this : marginal cost which is said to be around $40 and which the oil price is heading towards, and full cost which is said to be around $70 and which the oil price has fallen well below. So the new producers will keep producing for a while, because they have sunk all that investment and it is a bit better than not producing at all. But the Saudis can keep producing, giving the new guys more and more pain as they work flat out for a terrible return on investment. But while this scenario plays out, the new guys can't drill any more wells or ramp up production because that now makes a loss, and shale production in particular declines very rapidly and the industry economics depend heavily on new drilling. So the Saudis can drive many of them into bankruptcy and out of the business, and it might not take all that long.
There is another reason for the Saudis keeping on producing, and that is that OPEC has proved ineffective in recent years at cutting production. They are all too dependent now on the cash flow. So for the Saudis to cut would hurt just the Saudis, but if they keep producing then the pain is shared all round, with the most pain being felt by some exporting countries with weak economies such as Russia, Iran and Venezuela. The Saudis would be quite happy to see Russia and Iran suffering, and I suspect it's a big part of their strategy.
So to me the likely scenario is that Saudi and OPEC keep producing, the oil price gets near $40, the new guys start going bankrupt and pulling out, at which point the oil price starts recovering to the new balance point of around $70. Of course, that's very general, and the oil market may fluctuate wildly at times due to short term factors, changing sentiment/perceptions, etc, and the $40 and $70 levels are highly approximate and still dependent on other factors. I don't see oil stabilising above $100 (2014 $$) for well over a decade, without some major new disruption.
That's all just my view of things, others may see it differently, and they may of coourse be right.....
PS. That's oil. SXY I'm sure will be very profitable at $70 oil, but it they also have a lot of gas, and gas is a very different market. To me, SXY is a screaming med-term buy.
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