U.S. producers of sand used to extract oil from shale are raising prices due to stronger demand, a sign higher oil prices are improving the outlook for the domestic fracking industry.

U.S. shale oil companies, which pump sand into oil wells to make them more efficient, were hit hard by a 2014 global crude glut that hammered prices down from more than $100 per barrel (bbl) to near $26/bbl in February 2016. Dozens of shale companies fell into bankruptcy.

However, publicly traded sand companies have pulled thousands of rail cars out of storage after oil hit a one-year high in October, thanks to rising demand, according to recent earnings calls and interviews. Sand companies idled half of the roughly 125,000 frack sand cars they had in service in 2014 after oil prices plunged, experts said, but nearly all are expected to return to service by 2018.

Companies including Chesterland, Ohio-based Fairmount Santrol Holdings Inc; U.S. Silica Holdings Inc. of Frederick, Maryland; Southlake, Texas-based Emerge Energy Services LP; and Hi Crush Partners LP in Houston all saw increased business in 2016's third quarter.

Smart Sand held its IPO on Nov. 4, in another sign of industry confidence.

Rangeland Energy LLC, a privately held logistics company in Sugar Land, Texas, that unloads sand from rail cars to put onto trucks, is eyeing expansion to handle more volumes, said Patrick McGannon, vice president for business development.

"We'll have three more sets of three silos," he said of the company's sand storage facilities, which take months to set up. He said that will more than double current capacity, which is 26,000 tonnes of storage, according to the company's website.

Hi Crush had just over 600 rail cars in storage at the end of the year's third quarter, down from about 1,900 six months ago, CFO Laura Fulton said on an earnings call on Nov. 1.

"What a different picture we see from just six months ago," she said, adding that Hi Crush expects double-digit volume increases in the fourth quarter of 2016.

While the increase in sand volume represents a ramp-up of U.S. activity, it does not necessarily correlate with improved global oil demand, said Credit Suisse analyst Charles Foote. Fracking is unique because the sand is instrumental to the process, unlike other types of drilling.

"It's a good little pocket of positive activity, but I don't think you can extrapolate it much," he said.

Still, in increasing prices, sand companies are betting on an improving outlook for the oil industry, said Scott Cockerham, managing director at the consulting firm Huron. "It's a very symbiotic system," he said. However, of late, crude prices have dipped from their recent highs near $52/bbl; U.S. crude futures on Nov. 4 were trading at $43.87/bbl, a six-week low.

The U.S. has 450 active drilling rigs, according to Baker Hughes Inc. The number of rigs has been steadily rising from a six-year low of 316 reached in May.

"Our customers are talking about actually adding some crews, even in Q4, and certainly adding crews into Q1 2017," said Rick Shearer, CEO of Emerge. "We're very bullish, going forward, that our volumes and our pricing will continue to build."