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by Stockwatch Business Reporter

Global oil prices continued to climb in the wake of yesterday's OPEC agreement to cut production (and in defiance of serious doubts as to how effective the cut will actually be). West Texas Intermediate crude for January delivery added $1.47 to $50.91 on the New York Merc, while Brent for February added $1.85 to $53.69 (all figures in this para U.S.). Western Canadian Select traded at a discount of $15.60 to WTI ($35.31), up from a discount of $15.70. Natural gas for January shot up 20 cents to $3.54. The TSX energy index added 1.69 points to close at 221.87.

Oil sands producer MEG Energy Corp. (MEG) reached an intraday of $8.275, its highest level all year, before settling at $7.55, up 76 cents, on 13.9 million shares. This is on top of the 89 cents it added yesterday after OPEC decided to cut production and after the Canadian government decided to approve the Trans Mountain and Line 3 pipeline projects. Both decisions were taken as particularly good news for MEG. As analysts frequently point out, the bitumen producer is highly sensitive to changes in the price of oil. Just yesterday, shortly before OPEC's announcement, analysts at TD Securities cited MEG's responsiveness to commodity prices as a reason that it would benefit if OPEC decided to reduce production by 1.3 million to 1.5 million barrels a day. (The actual proposed cut turned out to be 1.2 million barrels a day.) This TD report came on the heels of a Macquarie report last week, which also highlighted MEG's sensitivity to oil prices and its potential to benefit if OPEC decided to cut production. Now OPEC has made that decision, and on top of that the Canadian government has given the go-ahead to two pipeline projects, both of which are expected to benefit producers in the oil sands. All in all, it has been a giddy couple of days for MEG, now flirting with $8 for the first time all year.

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