Russia, and the rest of OPEC+, have established a new supply cut agreement, though the particulars of the said agreement have not yet been released. As a result, the Energy Select Sector SPDR Fund (XLE) notched higher. Russia already announced cuts to its oil production earlier, dropping exports by around 500,000 barrels per day in August and 300,000 barrels per day in September. The cuts may continue through October as well, but Russia’s deputy prime minister, Alexander Novak, noted that it was too soon to tell if this was the case.
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Generally, Russia cut its exports down to help drive up the price of oil, which had been on a decline for some time, largely due to reductions in overall economic activity. For the most part, it succeeded; oil prices have been on the rise since July 2023, but they’re still nowhere near the highs seen in November 2022.
A look at the past five trading days for XLE highlights the level of impact today’s news had on it. Indeed, shares jumped almost 2% at the time of writing. As a result, investors are now up 3% during this timeframe.
