Business Corpus: Crude Oil Prices, Energy Stocks Rise As OPEC Production Dives Before Official Cuts Kick InCrude prices jumped Wednesday as OPEC production tumbled in December, before official OPEC and Russia output cuts kicked in. Energy stocks such as Exxon and Chevron rose. The post Crude Oil Prices, Energy Stocks Rise As OPEC Production Dives Before Official Cuts Kick In appeared first on Investor's Business Daily.

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Crude oil prices jumped Wednesday as OPEC crude oil production tumbled in December, even before output cuts kicked in for the cartel and Russia. Credit swing producer Saudi Arabia, which slashed crude shipments to the U.S. and China, as well as Libyan production woes and renewed sanctions on Iran. Exxon Mobil (XOM), fellow Dow Jones energy giant Chevron (CVX) and shale specialist EOG Resources (EOG) rallied along with other energy stocks.

U.S. crude oil prices fell early to $44.35 as weak Chinese economic data hit global financial markets. But they reversed higher, along with the U.S. stock market, to $46.54 per barrel, up 2.5%. Brent crude oil prices, the international benchmark, rebounded from an early low of $52.51 a barrel to close up 2.1% at $54.91.

Tanker tracking data compiled by Bloomberg showed Saudi Arabia crude oil exports fell to 7.253 million barrels per day in December from 7.717 million in November. Saudi Arabia, OPEC's swing producer, reduced shipments to the U.S. and China.

With protests limiting Libyan crude production and Tehran sanctions hitting Iran's output, overall OPEC crude oil production fell by 530,000 bpd in December to 32.6 million. That's the biggest drop since January 2017, when a previous OPEC crude oil production cut began.

Meanwhile, the latest crude oil production cut by OPEC and Russia kick in with 2019. Last month's OPEC meeting reached an accord to curb crude oil production by 1.2 million barrels per day starting in January. Leading OPEC member Saudi Arabia has also been trying to orchestrate a recovery in prices.

Again Capital founding partner John Kilduff told CNBC the "Saudis are trying to engineer a fall, if not plunge, in U.S. crude oil inventories to give the appearance of global tightness." He said another factor in rising crude oil prices is the fresh money that comes into the market at the start of the new year.

Exxon stock rose 2.2% on the stock market today, while Chevron stock bounced 1.75%. Among other big energy stocks, BP (BP) advanced 1.8% and Royal Dutch Shell (RDSA) climbed 1.8%. EOG stock jumped 3.9%.

Crude Oil Prices Dived In Late 2018

Still, Exxon, Chevron and other energy stocks tumbled in the fourth quarter as crude oil prices plunged more than 30% in the last quarter of 2018. Energy stocks' Q4 dive and Wednesday's rally underscore their reliance on crude prices.

Last October, Brent crude oil prices reached a four-year high of more than $86 per barrel. But with U.S. shale production booming and the global economic outlook cooling, oversupply fears took hold, even with the December OPEC meeting where OPEC and Russia agreed to cut crude oil production. Analysts have said oil prices could bottom out in the first quarter of 2019.

Russia managed to hit a post-Soviet era record, pumping 11.16 million barrels per day in 2018. U.S. output hit an all-time high in October of 11.54 million bpd.

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