Australian oil producers rise after Opec extends production curbs

Australian oil producers rose on Friday following a decision by the world’s biggest oil producers to extend a deal to curb production throughout 2018.

The S&P/ASX 200 Energy index in Sydney was up 2 per cent. Beach Energy gained 5.2 per cent, Woodside Petroleum was up 2 per cent, Origin Energy added 1.6 per cent and Santos was 1.4 per cent higher.

The share price moves followed a deal led by Saudi Arabia and Russia, who together account for one fifth of global supplies, to curb global output by 1.8m barrels in 2018. The agreement involves 24 countries inside and outside the Opec cartel.

Wood Mackenzie oil analyst Ann-Louise Hittle commented on the deal, which was struck at an Opec meeting in Vienna:

The stakes were high for OPEC. Despite the success in cutting output and follow-on price recovery, if the agreement had ended in March 2018, our forecast shows there would have been a very large 2.4 million barrels per day year-on-year increase in total world oil supply for 2018. That would have led to a persistent oversupply for every quarter of 2018.