The Organization of Petroleum Exporting Countries concluded a deal to curb oil supply, its first cut in eight years, bolstering crude oil prices and energy-related ETFs.
Leading market gains on Wednesday, the SPDR Oil & Gas Equipment & Services ETF (NYSEArca: XES) jumped 12.8%, PowerShares DWA Energy Momentum Portfolio (NYSEArca: PXI) surged 11.7% and PowerShares S&P SmallCap Energy Portfolio (NasdaqGM: PSCE) advanced 11.1%. The broader Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy ETF, was 5.7% higher.
Meanwhile, the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, gained 9.3% and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, rose 9.8% with WTI crude oil futures trading at $49.3 per barrel and Brent crude at $50.2 per barrel.
Iranian Oil Minister Bijan Namdar Zanganeh told reporters in Vienna Wednesday that OPEC will cut output by 1.2 million barrels per day to 32.5 million barrels per day, Bloomberg reports.
In a reversal of previous sentiments, Saudi Arabia accepted Iran’s higher output target as a special case. Previous OPEC talks broke down after Iran, which suffered from curtailed exports under strict global sanctions, argued for increasing its output to pre-sanction levels.