Will OPEC finally stop drowning the market in a global oil supply glut that keeps prices tamped down far below $50 a barrel?
Prospects for just such a development caused a geyser among oil stocks in midday trading, following a Wednesday report that oil cartel members agreed to cut production to 32.5 million barrels per day from about 33.2 million currently. The report, by Reuters, was based on two anonymous OPEC sources.
OPEC will likely finalize production levels in a formal November meeting, according to the report, with one source adding that non-OPEC producers will be encouraged by the cartel to cooperate with the agreed-upon production level.
The price for the U.S. benchmark crude, West Texas Intermediate, surged more than 5% to $46.92 a barrel.
Shares of Oklahoma City-based oil giant Chesapeake Oil (CHK) and Swiss offshore driller Transocean (RIG) , both members of Real Money's Stressed Out watch list, were up about 8% and 7%, respectively, before Wednesday's closing bell, buoying them to the top of the S&P 500.
Murphy Oil (MRO) was the overall S&P 500 topper with shares of the El Dorado, Ark.-based oil and gas giant up about 10% in mid-afternoon trading, and Oklahoma City-based Devon Energy (DVN) was not far behind as shares rallied about 8%.
Meanwhile, fellow Stressed Out member Tidewater (TDW) (a non-S&P 500 member) was up nearly 15% in mid-afternoon trading. Despite the day's gain, shares of the struggling New Orleans-based petroleum shipper are still down nearly 60% so far in 2016.