Small-cap energy and oil services ETFs were leading the market rebound Friday after the Organization of Petroleum Exporting Countries (OPEC) agreed to only modestly raise oil supplies to head off rising prices.
On Friday, the PowerShares S&P SmallCap Energy Portfolio (NasdaqGM: PSCE) rose 5.0%, SPDR Oil & Gas Equipment & Services ETF (NYSEArca: XES) increased 4.6%, VanEck Vectors Oil Service ETF (NYSEArca: OIH) gained 4.4% and iShares U.S. Oil Equipment & Services ETF (NYSEArca: IEZ) was 4.4% higher. Meanwhile, the Energy Select Sector SPDR (NYSEArca: XLE), the largest exchange traded fund dedicated to energy equities, was up 2.6%.
Oil services stocks are usually highly correlated to oil prices and have been among the worst or best performers in the energy space, depending on what direction oil prices were swinging toward. On Friday, West Texas Intermediate crude oil futures were up 4.8% to $68.7 per barrel while Brent crude was 2.7% higher to $75.1 per barrel.
Oil, Energy Markets Strengthen
Oil and the energy markets strengthened Friday after OPEC ministers announced a deal to increase oil supplies from the group, which has been curbing output in order to counteract the global supply glut that pushed prices down toward record lows.
On Friday, OPEC members agreed to start pumping out more oil, but the agreement will not end the group’s 18-month-old deal to cap its overall output, CNBC reports. The cartel is seeking to cut no more than 1.2 million barrels per day, the target they set in November 2016, but its statement remained ambiguous.