For the first time since 2008, OPEC has reached an agreement to cut oil production. The cartel announced its decision to reduce output by 1 million barrels a day (b/d) at its headquarters in Vienna on Wednesday, sending oil prices soaring more than 7%.
Today’s announcement marks the end of the cartel’s “pump-at-will” policy implemented in 2014. The decision to cut output by 1 million b/d represents a reduction of roughly 1% of worldwide output, which should help aid the global supply glut (Also read: OPEC Has Finally Agreed to Cut Output, Sending Oil Up 7%).
Saudi Arabia is taking the biggest hit, cutting its production by 0.5 million b/d, while Iran is set to simply freeze its production at 3.797 million b/d. Non-member Russia will also need to sort itself out; the country did not attend this week’s meeting but has been open to cutting production in line with the cartel in the past.
While there is still some sorting out to do abroad, some of the biggest winners following OPEC’s announcement were U.S. oil producers. The flooding of the market with excess oil was seen by many as an attempt to drown out American companies, and the end of this policy may mean a more competitive global market.
With this in mind, check out these five U.S. oil stocks that have gained more than 10% on Wednesday:
1. Matador Resources (MTDR - Free Report)
Matador Resources is an oil and natural gas producer with operations primarily in Texas and Louisiana. The stock is currently a Zacks Rank #2 (Buy), and shares gained more than 18% in Wednesday morning trading.
2. Denbury Resources (DNR - Free Report)
Denbury Resources is an oil and gas company headquartered in Plano, Texas, with operations primarily in Gulf Coast region. The stock currently holds a Zacks Rank #2 (Buy) and was up nearly 22% in morning trading Wednesday.
3. Abraxas Petroleum (AXAS - Free Report)
Abraxas Petroleum is an independent energy company with oil and gas operations in the Rocky Mountains, Powder River Basin, Permian Basin, and South Texas. The company stands as a Zacks Rank #2 (Buy), and shares were up over 11.5% on Wednesday morning.
4. Approach Resources (AREX - Free Report)
Approach Resources is an operator of unconventional oil and gas properties in the Texas, New Mexico, Kentucky, and Western Canada. The stock currently has a Zacks Rank #2 (Buy) and gained over 18% in morning trading Wednesday.
5. Diamondback Energy (FANG - Free Report)
Diamondback Energy is an oil and gas company with operations in the Permian Basin in West Texas. The stock is currently sitting on top of the strong industry with its Zacks Rank #1 (Strong Buy), and shares of FANG gained more than 11.2% on during Wednesday morning trading.
OPEC’s announcement is a big deal for the worldwide energy industry, but some of the biggest movers today were the U.S. oil producers. Investors should keep an eye on these stocks, as they may be set to take off now that prices are finally on the way back up.
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