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Today, Wednesday, October 5, OPEC and its allies, including Russia, approved a two million barrel-a-day cut in oil production. This is the largest cut in production since the onset of the pandemic.

Here’s the key paragraph in the OPEC+ statement: “Adjust downward the overall production by 2 mb/d, from the August 2022 required production levels, starting November 2022 for OPEC and Non-OPEC Participating Countries as per the attached table.”

On the news, oil and oil stocks extended the rally that began on news leaks yesterday.

As of 3 p.m. New York time, U.S. benchmark West Texas Intermediate was up 1.50% to $87.82 a barrel and international benchmark Brent was higher by 1.83% to $93.48 a barrel.

Oil stocks were higher with plays on U.S. oil shale production gaining the most. Pioneer Natural Resources (PXD) closed up 3.10%. Devon Energy (DVN) gained 2.62%.

The Energy Select Sector SPDR ETF (XLE) ended higher by 2.07%.

The U.S. Oil Fund (USO) gained 2.36% and the United States Natural Gas Fund (UNG) was ahead 1.92 % on the day.