Energy stocks are going nuts

Prakash Singh/AFP/Getty Images

Energy stocks surged on the ASX after oil producing countries agreed to cut production.

Global oil prices jumped by about 9% overnight.

The rally was driving the ASX200 higher. A short time ago, the index was at 5,468.80, up 28.33 points or 0.52%.

BHP, the world’s biggest miner, was up 4% to $25.47 and Woodside Petroleum 6% to $31.40. Fortestcue Metals was up 8% to $6.35.

Santos added 12% to $4.405, LNG 13.8% to $0.70 and Origin Energy 7.4% to $6.38.

Qantas fell 2.8% to $3.20. The airline is sensitive to oil price rises because of its exposure to the cost of jet fuel.

OPEC and non-OPEC producers will be reducing output by about 1.8 million bpd, or 2% of the total world output.

The decision to cut reflects a desire to end a global glut which has kept prices depressed for more than two years.

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